Economic Commands are Different from Political Commands or Taxes

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Jason Kuznicki

Jason Kuznicki is a research fellow at the Cato Institute and contributor of Cato Unbound. He's on twitter as JasonKuznicki. His interests include political theory and history.

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  1. Avatar ThatPirateGuy
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    says:

    In related news the situation that most closely resembles the mandate may be changing.

    http://www.latimes.com/business/la-fi-mortgage-deduction-20101220,0,2642237.story

    Mr. Farmer said he doesn’t need my help in ending this policy but should it be taken up by the next congress I will definitely call/write my congress critters.Report

  2. Avatar Rufus F.
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    Okay, it’s pretty damned likely that you’ve spent more time researching this topic than I have, so why is the legal requirement to have car insurance different? I’m not trying to argue about it- I just don’t know.Report

    • Avatar Boegiboe in reply to Rufus F.
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      I think it’s mainly because you can choose not to own and drive a car, and also technically important is that the requirement to have car insurance is not from Federal law. It seems to me that the comparable balance here would be that people ought to be able to opt out of medical care altogether if they don’t want to buy medical insurance. That is, if you don’t have medical insurance, no hospital will admit you, no doctor will see you, no ambulance will carry you, etc. Or, you could pay the fee in the HCRA and be allowed to use medical facilities at full cost.

      But, see, that would be even more unpopular once the stories about people left to bleed on the side of the road start popping up. The problem is that we think everyone has a right to be cared for by others–that is, we have a right to force a doctor to take care of us in an emergency. And, therefore, we have a right to health care without having to pay for the system that gives it to us.

      You know, if we just spent a few million more dollars on the bureaucracy to allow it, we could make the insurance premiums a tax, where you pay a minimum amount of $N per year, and then the government could pay the insurance companies that much even if you decide not to get insurance. That way, we could pay more (for bureaucracy) for the same products, and people would still be allowed to not be insured but could use emergency services, which are offset by the $N health care tax.

      Don’t get me wrong, I actually agree with Jason on the point about Congress being allowed to force us to buy something being a very bad precedent to set. It’s just unfortunate that this imperfect but workable health care overhaul had such a rotten egg in it.Report

      • Avatar Rufus F. in reply to Boegiboe
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        I probably already said this, so I apologize for that, but I lived in Canada for a few years before becoming a resident and, one evening I cut my hand open with a wine bottle that broke unexpectedly as I was pulling the cork out. So, I went to the emergency room in Ontario with no health card. What they do, in that situation, is have you pay the full price out of pocket. It’s still cheaper than it would be in the US to get stitches because the state regulates the prices. But Canadians who don’t want the health card can go this route too. It’s just that, as they all have to pay taxes, it would be sort of pointless to opt out of the health card.Report

        • Avatar DensityDuck in reply to Rufus F.
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          There’s nothing stopping you paying for medical treatment full-price out-of-pocket in America. It’s just crazy expensive, and you often have to jump through a bunch of hoops (i.e. for some reason I can’t just walk into a lab and ask for blood tests, I have to have them ordered by a doctor first. And don’t get me started about needing a prescription to buy medication and equipment for chronic conditions.)

          It seems that they key is “state regulates the prices”. Well, and the fact that A: Canada has caps on malpractice awards, and B: Canada has a national nonprofit malpractice insurer. The USA has neither of these things.

          I’m not so sure about state-regulated prices, but I recognize that the unique nature of health services requires something different than pure capitalism. However, the other side of that coin is acting to ensure that the doctors’ costs of operation doesn’t drive them into bankruptcy.Report

  3. Avatar James Hanley
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    says:

    DeLong seems to be unfamiliar with Wickard v. Filburn, and seems to assume that Congress has had a general regulatory mandate from the very beginning. And yet he criticizes Jason’s grasp of constitutional history?

    Rufus, Two reasons. First, the federal government doesn’t require us to have car insurance, only states do. The Interstate Commerce Clause prohibits states from regulating commerce among/between the states, but leaves them plenary power to regulate commerce within the state as part of their general police power. Congress has no such general plenary regulatory power–despite Mr. DeLong’s misconceptions about that–although 20th century re-interpretations of the Commerce Clause pushed their authority in that direction.

    Second, nobody has to buy car insurance. It is a rule that accompanies a choice, the choice to own a car. * The insurance mandate accompanies the very fact that you are alive and a U.S. citizen. That makes it substantively different.

    I, too, think it’s unconstitutional, but I take a narrower view of the Commerce Clause than do most liberals–i.e., I take a view that’s closer to the pre-Wickard v. Filburn view, and believe that case was wrongly decided. I wouldn’t make any wagers on how the Supreme Court will rule, though, except that I’d wager it will ultimately come to them for a ruling, unless Congress pre-empts that by rewriting the legislation.

    ________________________________
    *Some people say, “but that’s not really a choice–you can’t live in the U.S. without a car.” That’s BS. I’ve done it and I know others who do it. If I lived in San Francisco again, I’d junk my car and just rent one when I needed one. If you live in a rural area, that’s by choice, too.Report

    • Avatar Rufus F. in reply to James Hanley
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      says:

      Okay, that helps a lot, thanks.

      Another question- as someone who actually is ticked off by the fact that my father will be legally required to buy a private product, but not troubled that Canada makes me and my wife pay taxes for a public version of the same thing- would that be less problematic for people here? If the US offered public health insurance, but everyone had to pay higher taxes, would people have the same problems with it? (Leaving out of course if such a thing would be possible politically in the states) I should also point out that, in fact, we’re not required to have a health card here in Canada, although we’re all entitled to one and have to pay taxes anyway so it would be sort of nutty not to take it.Report

      • Avatar RTod in reply to Rufus F.
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        My guess is that the answer is yes, they would. With few exceptions (like the kind of folks who gather at LOG), I think the Constitutionality of forced purchase is a tactical argument, not a values argument. Remember that the entire idea of the mandate was originally brought to public attention by Newt Gingrich during the beginning of the Clinton administration, as a way to avoid having government take over.

        I believe the mandate is the kind of solution that the same pundits you see talking Death Panels would be trumpeting if a GOP president/congress were in charge.Report

        • Avatar Rufus F. in reply to RTod
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          I can’t say about that. I will say that I’ve sort of stayed out of the debate living in Canada, but reading these points about the mandate here and in several other places, I have two thoughts: 1. The mandate was a bad idea that amounts to a sort of forced bailout of the insurance industry, 2. They really should have just gone with an optional public health card. I don’t know if people are trying to make the second point.Report

        • Avatar Jason Kuznicki in reply to RTod
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          says:

          With few exceptions (like the kind of folks who gather at LOG), I think the Constitutionality of forced purchase is a tactical argument, not a values argument. Remember that the entire idea of the mandate was originally brought to public attention by Newt Gingrich during the beginning of the Clinton administration, as a way to avoid having government take over.

          You are no doubt correct here. If Gingrich had ushered it through Congress, and if Romney had signed it into law, I’d be saying similar things. I’m a lot less sure about many of the people nodding in agreement.Report

      • Avatar DensityDuck in reply to Rufus F.
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        Actually, the US *already* offers public health insurance, and everyone *already* has to pay higher taxes for it–Medicare and Medicaid.Report

        • Avatar Rufus F. in reply to DensityDuck
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          Yeah that’s right! Okay, well let’s just expand Medicare to offer it to all ages. Everyone happy? (I’m guessing not)Report

          • Avatar RTod in reply to Rufus F.
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            Good, but it only solves one of the main issues (brining in millions of young, healthy people to lower the per capita cost). But you still need to tackle the larger more dangerous issue: Healthcare costs are rising at an exponential rate.Report

            • Avatar Rufus F. in reply to RTod
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              Yeah, that’s sort of the unspoken issue in the US. You pay more for every single health service than the rest of the world does. So, sure, public health care works okay here in Canada, but also the state tells the hospitals what they’re going to pay and thereby sets prices. Any sort of health care reform in the US that doesn’t address costs is sort of whistling in the dark, isn’t it?Report

              • Avatar gregiank in reply to Rufus F.
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                With all due respect ( you always knows what comes after a sentence that starts that way) you’re exactly wrong. The exorbitant cost of health care in the US was a major topic on lefty blogs during the HCR debate. It has been discussed for decades among those pushing for some sort of HCR. The O admin made an effort and took a bunch of shit for doing things that are aimed at reducing costs. One of the things Repubs spent a lot of time lying about was a few billions to go to researching the comparative effectiveness of various medical treatments so we could know what worked and what doesn’t. That was one of the issues that got turned into the “death panels” shit storm of lying. The current HCR is calculated to reduce the deficit although people on this blog don’t believe that. In short addressing costs was part of the current HCR and has been a long time push for reform advocates. Somehow that makes those of us who want and push for reform irresponsible.Report

              • Avatar Rufus F. in reply to gregiank
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                Okay, well now, was I wrong because I was too optimistic about American politics or too pessimistic about American politics? I mean, uninformed is a given. I live in Canada.Report

  4. Avatar gregiank
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    Many liberals absolutely hate the part of the HCR that mandates buying insurance from private companies.That comes more from hating the insurance companies, but still that is the most common lefty criticism of HCR.

    Car insurance is not a great metaphor, not only because we don’t have to buy a car but we are almost all certainly going to use health care. If we can’t pay for it ourselves then the public is on the hook. Car insurance is not a great metaphor, not only because we don’t have to buy a car butReport

    • Avatar Rufus F. in reply to gregiank
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      No I didn’t think it was a great metaphor. I was curious about why I’ve never heard anyone get upset about having to buy car insurance in order to drive.Report

      • Avatar RTod in reply to Rufus F.
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        says:

        There’s actually an answer to that: people who hate those laws don’t need to get angry. It’s estimated that over 30% of drivers in states where insurance in mandated don’t bother to buy insurance.Report

        • Avatar Rufus F. in reply to RTod
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          says:

          Okay, now here’s a more self-oriented question- anyone know why car insurance is much more expensive in Canada than the US? I used to joke that they were trying to make up for the health insurance by soaking us on car insurance, but damned if my rates didn’t double when I imported my car up here, and that was the cheapest I could find.Report

          • Avatar RTod in reply to Rufus F.
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            Short answer: the law of large numbers (and Canada’s relative lack thereof). Canada has a legal liability system that is somewhat close to the US, so potential liability issues are significantly greater than in, say, Sweden or Germany. But Canada lacks the sheer number of cars and drivers that the US has, and therefore insurers have greater inherent risk – and charge appropriately.Report

      • Avatar gregiank in reply to Rufus F.
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        Because nobody has found a reason to demagogue mandatory car insurance as a crushing imposition on our freedom. Yet.Report

      • Avatar James Hanley in reply to Rufus F.
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        I was curious about why I’ve never heard anyone get upset about having to buy car insurance in order to drive.

        It’s also important to look at what type of car insurance you have to have. Generally (although state laws vary so much it’s hard to make an absolute statement) you’re only required to buy liability insurance, to cover that other person you harm. You don’t normally have to buy insurance to cover your own car. I drive used cars, and the amount I would pay to insure them would quickly mount to more than their value. I’m better off paying out of pocket for a “new” clunker if I total one. So I don’t have comprehensive, just liability. And I think that’s fair, because nobody else should have to cover the cost of me hurting them.Report

    • Avatar Scott in reply to gregiank
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      Would a better metaphor be that as everyone has to buy food to live that the gov’t can force you to buy food the gov’t deems proper?

      Given that Obama supposedly taught Con law, I don’t know how he can believe the Dems’ rationale for the mandate.Report

      • Avatar RTod in reply to Scott
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        says:

        Yes, and in fact the “grocery store” metaphor is the best I’ve ever heard. (In a nutshell: if your employer paid a subscription to the local grocery store and it cost you $5 to shop there, regardless of what you bought, what would it do to prices over all – and would those that didn’t have an employer paid subscription be able to buy food at all in 20 years?)

        Regarding the belief issue, I don’t think that any of the higher up GOP or Dems believe any of the arguments. They’re (sadly) trying to win with sound-bites, not educate an an electorate.Report

      • Avatar gregiank in reply to Scott
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        The free market seems to work fine with food. Food is not so expensive that 40 million or so people can’t afford it and if you need to eat a lot of food you can’t be denied food by grocery stores because you will cost them to much money. Analogy fail.

        sort of funny how nobody thought the mandate was unconstitutional until HCR passed. Repubs loved the idea when they proposed it and plenty of people still think its fineReport

        • Avatar RTod in reply to gregiank
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          The analogy is only meant to underscore one of the reasons why healthcare costs rise, and why as time goes on more and more people can;t afford it. The real area where it falls somewhat flat is in your tying food to the free market system. The biggest problem with healthcare is that it does NOT in fact follow the free market system.Report

        • Avatar Jason Kuznicki in reply to gregiank
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          says:

          For the reason the “free market” doesn’t work well in health care, see RTod’s comment just above your own. That weird grocery subscription thing? That’s what our health care system was like. I wouldn’t have called it a free market. Would you?Report

        • Avatar dexter in reply to gregiank
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          You might want to do a little research about your second sentence. There are about 36.5 million Americans who experience hunger or the threat of hunger.Report

      • Avatar James Hanley in reply to Scott
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        Let me preface my critique by pointing out that I’ve already stated that I believe the mandate is unconstitutional.

        But that said, this critique is rather ridiculous, because it assumes that anyone who really knows constitutional law must agree with Scott and me. That’s simply not true. While there are good constitutional scholars who agree with the two of us, there are also good constitutional scholars who don’t. So, please, let’s make criticisms that aren’t based on such totally spurious assumptions.Report

  5. Avatar RTod
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    “Car insurance is not a great metaphor, not only because we don’t have to buy a car but we are almost all certainly going to use health care. ”

    And gregiank hits the bulls-eye.Report

    • Avatar Jaybird in reply to RTod
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      Yes, and that’s exactly why it changes the game.

      There is a difference between a gamble that X is going to happen (a gamble that you’re going to be in a car accident) and a sure thing (a gamble that you’re going to die).

      The old line about how we spend most of our health care dollars on folks in their last year of life… well, of course that would be the case.

      As the dynamic changes from wager to sure thing, the price of the bet and the price of the payout come closer and closer together until you get to the point where insurance is additional overhead rather than something to cover a gap.Report

      • Avatar RTod in reply to Jaybird
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        Yes – and add to that the fact that the laws of supply and demand work in reverse when it comes to healthcare, and that overhead growing exponentially becomes another sure thing.Report

        • Avatar Jaybird in reply to RTod
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          I’m afraid that I’m going to need you to unpack “the fact that the laws of supply and demand work in reverse when it comes to healthcare” because my immediate thought when reading that sentence is “no… that’s so completely wrong that he can’t possibly mean that”.Report

          • Avatar RTod in reply to Jaybird
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            Actually, I did mean it. To illustrate:

            Taking Rufus’s car example. Let’s say you live in a town that has one, single muffler repair shop – and Mike Farmer lives in a town with the same population and same number of cars, and there are 50 muffler repair shops. As we all know, your repair guy would b e able to charge higher prices, and greater margins, and have a longer line at his door because yadda yadda yadda…..

            But change the exact scenario from muffler repairs to back surgeons. The town that has more available surgeons will have greater demand per “shop,” and will be able to get people to pay more per surgery than the town with fewer back surgeons. And the relative “healthiness” of each people’s backs won’t be any better from one community to the next. In fact, because all medical procedures come with a certainty of risk of creating alternative medical issues, the more doctors you have doing procedures, the more (statistically speaking) chances of you have of needing more medical intervention.

            Simply put, people don’t make rational decisions when it comes to healthcare, and study after study show that no conditions – even economic – force them to do so. Here’s a great example: Your health insurance carrier isn’t structured the same as your auto insurer. Your health insurer has two functions: The minor function, which is to process claims, and the major function, which is to negotiate lower prices per procedure from your provider and keep your provider from making you undergo unnecessary but costly and potentially risky procedures. Now ask yourself – how many people, when their carriers do just that, don’t scream and holler and hold their breath and call their congressperson until the company who they have hired as their advocate backs down and caves in to the person trying to sell them something they don’t need?Report

            • Avatar Jaybird in reply to RTod
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              In the long run we are all dead.

              That said… what you’re painting for me is a picture of an unsustainably distorted market. To be sure, it’s as distorted by expectations as it is by laws, but it seems to me that the laws of supply and demand are close enough to “laws” to call them that and so, eventually, The Gods of the Copybook Headings will be back explaining to us, once again, how the world works.

              If we want more and cheaper health care, we need more doctors, nurses, and otherwise trained professionals. Not more laws, not more “coverage”.Report

              • Avatar RTod in reply to Jaybird
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                “If we want more and cheaper health care, we need more doctors, nurses, and otherwise trained professionals. Not more laws, not more “coverage”.”

                No, because it works the opposite in healthcare. In fact, back in the early 70’s, when the government was first starting to notice the trend and calculate that it couldn’t sustain in the long run, the Nixon administration came up with a plan to reduce the cost increase rate: the federal government would pay for the education of young folks to become medical specialists (the most expensive kinds of doctors), thereby flooding the market with specialists and driving costs down. Because back then no hone had ever really studied the financial side of healthcare, and it was assumed that the traditional economic model would hold.

                Instead, when that wave of recipients hit the market, the opposite occurred: Increased supply INCREASED the demand and the ability to charge for greater margins, and the annual-cost-increase percentage was driven up as well.Report

              • Avatar 62across in reply to RTod
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                RTod, can you cite anything for this specialists scenario? I find the whole healthcare to the market relationship very interesting and would like to read more. Data rather than anecdotes, if you know where I can find it.Report

              • Avatar Jaybird in reply to RTod
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                Call me a religious man but I cannot believe that the reason the price went up had anything to do with greater supply.

                Perhaps the greater supply resulted in greater education which then flipped the switch from “no expectations of medicine” to “huge expectations”… or, let me think about this, the fact that people no longer die of acute stuff means that they require *MORE* health care for chronic stuff.

                (Indeed, a dead guy requires significantly less health care than an alive guy.)

                The solutions to increases in demand include demand management and maybe that would be a solution now that acute problems have been managed while chronic haven’t…Report

              • Avatar RTod in reply to Jaybird
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                “The solutions to increases in demand include demand management ”

                Totally, totally agreed.Report

              • Avatar James K in reply to RTod
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                I think you’re over-inferring from very weak evidence. It is far more likely that prices rose due to confounding factors.Report

  6. Avatar Mad Rocket Scientist
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    says:

    From Here:

    It has occurred to me that some people are not buying a newspaper, so they may not be fully informed. And not being fully informed can be harmful in this day and age.

    So what’s the answer? Why, Congress should pass a law requiring every American to buy a newspaper every day.

    The newspaper industry, of course, would love that. Goodness! Our circulation would go up and we’d be raking in the dough. Maybe I could even get a raise.

    But could the government force every American to buy a newspaper every day, just because the information they get from it might be beneficial to them?Report

    • Avatar RTod in reply to Mad Rocket Scientist
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      Th difference is that healthcare is, in today’s world, a necessity, but a necessity that acts differently (from an economic perspective) than anything else I’m aware of: healthcare, and the financial system that surrounds it, actually respond in the opposite manner than everything else in the supply and demand model. And this creates an exponential cost increase.

      For the past 30 years our employers have dutifully absorbed that cost increase, so most of us have been blissfully ignorant. But we have already hit a saturation point where employers can no longer absorb the additional annual cost, but it continues to rise exponentially.

      Without SOME kind of intervention, by 2020 It will cost a family of three almost $50,000 a year for basic medical insurance. In short, the current system is not sustainable; and the fact that the industry does not follow market principals means that a “just let the market fix it” won’t work.Report

      • Avatar Scott in reply to RTod
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        So that is the best justification you can come up with for allowing the federal gov’t to violate the Constitution?Report

        • Avatar RTod in reply to Scott
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          ????

          I am not arguing for or against anything. I’m simply stating that the system cannot continue as is.

          Say what you will about Obama’s fix (and for the record I’m not a fan of the current HCR), but it does have the virtue of not sticking one’s head in the sand and hoping the problem goes away, which at the very least gives him extra credit point in my book.Report

          • Avatar Scott in reply to RTod
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            Fine, folks agree that the system is broke. Does that allow you to ignore the Constitution in order to fix things?Report

            • Avatar RTod in reply to Scott
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              First, I’m not convinced that it’s unconstitutional. Second, I tend not to put too much confidence in the other side, and won’t until they come to the table with a potential solution.Report

              • Avatar Jason Kuznicki in reply to RTod
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                I tend not to put too much confidence in the other side, and won’t until they come to the table with a potential solution.

                This illustrates a problem libertarians often face. Where advocates of more government planning will always have a definite plan and appear to be going places, libertarians by the very nature of their prescriptions will not. To match the detail and apparent sense of in-chargeness of the other side, we would have to become the other side.

                A couple of plausible stabs at reform, though, would be to allow insurers to compete across state lines and to decouple insurance from employment by removing its tax exemption.

                Removing the exemption in particular would do a lot to restore health insurance to something actually like traditional insurance. This would be a good thing for everyone involved.

                Picture this: Employers face a choice in how to pay their employees; they can do it by dropping money down slot A or down slot B. On the way down slot A, the government takes a bunch of it, so less reaches the employees at the end. Or the way down slot B, all of the money arrives at its destination, provided it’s spent on health care.

                Because it’s possible to spend essentially an unending amount of money on health care, and because few of us know what we really need or don’t need, health care costs are bound to rise as a percentage of income. They will likely fall when this apparatus is scrapped.

                Will it be enough? Never, of course. Nothing is ever enough. But it will be a start.Report

  7. Avatar 62across
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    I’m no fan of the mandate and I buy the argument you are making here regarding command versus taxes.

    So, what is the better approach to the free-rider problem the mandate was meant to address? Without a mandate, the requirement to accept those with pre-existing conditions becomes a big burden on the insurance companies.Report

  8. Avatar DensityDuck
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    I also think that “health insurance::car insurance” is an improper analogy, but not for the “you HAVE to buy health insurance” reason.

    Instead, it’s because if car insurance were health insurance, it would be the kind of “high-deductible catastrophic-illness” insurance that we’re all supposed to hate.

    My car insurance basically covers nothing but collision damage. (There’s some stuff in there about covering medical bills of persons injured in an accident, but that’s not a benefit that I’d receive so it isn’t really relevant.) Windshield repairs are free; collision damage has a deductible that I pay out-of-pocket and then it’s covered 100%. (of course, I have to go to the body shop the insurer likes.)

    If this were health insurance, then it’s probable that any emergency treatment or long-term serious illness (i.e. cancer) would be covered 100% after a deductible (as long as I used the insurer’s preferred vendor, and the vendor gets to pick the treatment regime.) Everything else–including regular preventive checkups and treatment of non-emergent injury or illness–would be paid by me, out-of-pocket, in full.

    And, actually, I’d kind of be okay with that. I’d be happy with the notion of Healthcare Spending Accounts (HSA) being made a national thing, with money in the account rolling over instead of vanishing at the end of the year, and patients being expected to just pay cash for medical services. But this would have to be paired with significant changes in the pricing structure for those services–in particular, the default assumption that insurance is paying for everything would have to go away.Report

    • Avatar RTod in reply to DensityDuck
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      Jaybird said it really well above, but this is the best way I can think of to illustrate the difference between the two different kinds of insurance: Health is for catastrophic costs that statistically speaking you WILL incur. Auto is for catastrophic costs that statistically peaking you won’t:

      Best way to bankrupt that auto insurance industry? Make sure that being hit by a bus is the #1 cause of death in America. Best way to make sure Health insurance costs stop rising and become affordable for all? Same answer.Report

    • Avatar ThatPirateGuy in reply to DensityDuck
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      Cars don’t have communicable illnesses that can easily be prevented with vaccines that only work well when most cars are vaccinated. They also don’t have diseases that spread easier when un-diagnosed.

      People do. Canada is a better option than the nightmare scenario that you outline. So is pretty much any modern western democracy.Report

      • Avatar James K in reply to ThatPirateGuy
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        That “nightmare scenario” is how Singapore runs it’s healthcare system. Quite successfully, by all accounts.

        And the public heath effects of vaccines are a classic positive externality of consumption. The way you deal with that is by subsidising vaccines, not by turning health insurance into some bizarre psuedo-welfare system. The function of insurance is to remove risk, by protecting you from adverse events that would ruin you. You shouldn’t be insuring against high-probability events. If someone can’t afford the expected cost of their future healthcare insurance can’t help them, they need welfare. Either give them welfare or don’t, but don’t try to turn insurance into something it can’t be or you end up with a very screwed up healthcare system.Report

  9. Avatar Mike Farmer
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    I say let’s quit with all the political wrangling since we will never willingly allow healthcare to operate in a free market, and this new law is so convoluted it won’t work — just nationalize it and see what happens. Once we’re bankrupt, then we can start over without wondering how it would be under complete government control. Total financial collapse might be good for the nation — to put things in perspective.Report

    • Avatar North in reply to Mike Farmer
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      Sorry to bust your bubble there Mike but every indication from the more socialist neighbors is that nationalized healthcare doesn’t lead to national bankruptcy but rather to some form of government rationing of healthcare.Report

      • Avatar Mike Farmer in reply to North
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        Well, North, we aren’t those other countries, and I’ve heard some bad things lately about those other countries, but if it’s just a little rationing, hell, let’s do it! We will certainly have better rationers in America — Fuck yeah, Amurica!Report

  10. Avatar RTod
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    says:

    “Total financial collapse might be good for the nation — to put things in perspective.”

    I’m not sure that each sentence doesn’t cancel the other one out. Letting the country (which, even in a bad financial time is still pretty amazingly prosperous, all things considered) collapse, and all of the hardships that would follow from that… for what? A more pure political ideal to flourish?

    I think we have a different idea of perspective.Report

  11. Avatar Pat Cahalan
    Ignored
    says:

    Side note about the whole “car insurance” analogy:

    What we ought to have learned from state-mandated car insurance programs is that mandated insurance programs don’t solve the problem of people driving without insurance. They demonstrably, empirically, do not work. My main objection to the mandate isn’t that I think it’s unConstitutional (although I generally agree that it probably is but no more unconstitutional than many things that we currently regard as constitutional anyway); my main objection to it is that it *doesn’t do the job*.

    People are still going to pass on getting health insurance. They’re still going to get sick and injured. We’re still going to have mandated response regardless of insurance status (and I’d argue that we really, really don’t want to *not have that* in any case). So we’re still going to have free riders and we’re still going to have cost-shifting to recover those costs, because it’s still going to cost hospitals and fire departments and health clinics to provide care for people who don’t have insurance.

    Much better to say, “If you don’t want insurance, you don’t have to get it. But if you are admitted to a hospital, and you don’t have insurance, the hospital will indeed provide services to you. They will then bill the federal government, as there is a legal prohibition against cost shifting and the hospital needs to recoup the costs to survive. And then the federal government will plop that expenditure on the end of your tax bill, with some appropriate waivers for insurance history.”Report

    • Avatar gregiank in reply to Pat Cahalan
      Ignored
      says:

      Mandated car insurance does not eliminate every dufus who drives without insurance. however most people get insurance including many people who have to struggle to do so. It’s a bit silly to say that since some people don’t follow the law, the law doesn’t work. By that no law has ever worked. Insurance rates are high precisely because of the law. Establishing perfection as the only criteria for success is a strawman.Report

      • Avatar Jaybird in reply to gregiank
        Ignored
        says:

        But what is somewhat different is that if you have car insurance and some, oh let’s pick a gender out of a hat, female driver without insurance rams into your car, *YOU* are covered and *SHE* is without a car (and probably has to pay 20 bucks a week for a long, long time).

        If it’s health care, however, and, let’s use the other gender, some dude doesn’t have insurance… will you deny him health care? Will you go through his bank accounts and force him to buy insurance to cover the last X years? Make him sell his house? His car? His xbox?Report

      • Avatar Pat Cahalan in reply to gregiank
        Ignored
        says:

        Dude, California has had state-mandated insurance for years and we’ve had about a 20% non-compliance rate since it went into effect in 1975 to the best of my knowledge. Even making it harder to bypass in 1997 didn’t have much effect.

        More here: http://www.jstor.org/stable/3692456
        And here: http://www.insurancejournal.com/magazines/southcentral/2003/08/18/coverstory/31628.htm
        And here: http://www.lagop.org/index.cfm/article_24.htm

        There’s no strawman… I’m not demanding perfection, I’m demanding that it actually produce a measurable result that offsets the costs and the other externalities, given the increase in audit that is necessary to ensure compliance.

        And by that metric, it fails. It costs the DMV more to track and enforce than it is worth.Report

  12. Avatar Brad DeLong
    Ignored
    says:

    Re: “if Congress is held to be competent to identify economic advantages and to deploy all citizens in pursuit of them, then our form of government will be neither the classical liberal one I favor nor the mercantilism that De Long’s post seems to favor.”

    It is not a question of “favoring” mercantilism. It is a question of whether the Constitution was in its origins a “mercantilist” document–whether Congress’s power to regulate interstate commerce was then thought to be a narrow or a broad one. (This is, I should add, a separate question from what a constitutional provision means now: the answer to that question requires that we understand why we have not amended it–and it is clear to me that if we had maintained a narrow reading of the commerce clause power we would have amended it in the 1930s.)

    Me? I find my great-great uncle Abbott’s argument in the 1931 American Economic Review that classical liberalism as we know it does not predate Nassau Senior and the anti-Corn Law League of the 1830s fairly conclusive.And I find Jefferson’s “Embargo Act” in time of peace as well to be fairly conclusive evidence that Congress’s interstate economic regulation power was thought to be plenary. And do note that the text of the Fifth Amendment strongly suggests that somebody thought that Congress’s commerce clause power extended to eminent domain *without* compensation…Report

    • Avatar Mike Farmer in reply to Brad DeLong
      Ignored
      says:

      Albert Jay Nock made a case that the looseness of the commerce clause was Hamilton’s victory in favor of a Merchantile-State.Report

    • Avatar James Hanley in reply to Brad DeLong
      Ignored
      says:

      The U.S. could be a mercantilist state without giving Congress much authority over commerce that merely affects interstate interests, because the mercantilism was outward looking. The power to set tariffs and make treaties–both powers given to Congress and denied to the states, is the mercantilist authority. The ICC was primarily to stop states from setting tariffs and otherwise discriminating against each other economically–it was intended to prevent the states from being mercantilist themselves, and effectively created a free trade zone. To say that the ICC gives mercantilist authority to the federal government seems to me to be a bizarre argument–it certainly doesn’t have much constitutional authority pre-Depression. I think Mr. DeLong is chasing a chimera here.

      As to his 5th amendment argument, a more likely explanation of the compensation clause was simple fear of government over-reaching its authority. That wasn’t exactly an uncommon theme among those who demanded a Bill of Rights. There he’s looking for an interpretation that’s rather more sophisticated than is necessary to explain it in the context of its time.Report

      • Avatar Heidegger in reply to James Hanley
        Ignored
        says:

        Are impersonations allowed? Great.
        Okay, here goes–I’m going to pretend I’m James Hanley responding to this.

        Heidegger, once again you fail to deal with the specific issues as stated. Your bigotry is only outweighed by your stupidity and frankly, I find you to be one of the most loathsome, worthless human beings I’ve ever the misfortune of coming in contact with. Please don’t take this the wrong way. I mean no offense when I say this, but if I were one of your parents, I would seriously seek legal remedy to have you aborted, regardless of your current age. If that fails, and considering you are a resident of Michigan, I would advise you to seek out the services of Dr. Kevorkian. I would even be more than happy to drive you there. And, for that matter, I would gleefully pay for the entire “operation”. If I’m not mistaken, I think his success rate for curing insomnia and every other known malady to afflict a human being, is close to 100%. Do consider. Again, please do not take this the wrong way. I bear no ill will or animus toward you.I’m sure you understand your utter valuelessness in this world and your exit just can’t come soon enough. You are a dishonest, lying, despicable, repugnant, ignorant, human being who has the existential value of a gnat. (Forgive the insult all you gnats out there.) Please, please, please, make all of us at the League of Ordinary Gentlemen happy, and just die. I would also be more than happy to provide you with 874 philosophical arguments (all in Latin if you prefer) for why your right to existence ended the day you were born. Merry Christmas.

        With all due sincerity, Professor HanleyReport

  13. Avatar Christopher Carr
    Ignored
    says:

    It seems to me like there is always a Table of the Worthy of sorts that gets to weigh in on national industry policies. Instead of coming up with policies that are beneficial for everybody, we work on ways to throw bones to all the relevent parties. How can we switch to a system with more central control without destroying private enterprise? I know, let’s just nest a layer of corporations between consumers and legislators. How can we improve food safety while keeping costs low? Let’s put it all under the umbrella of FDA control, but we can compensate with more farm subsidies and restrictions on foreign competitors.

    What you wind up getting with such a system is a kind of mercantilist, privatized oligarchy that can only really leverage its own clout against other rival mercantilist, privatized oligarchies to succeed. The constitution sets down and elaborates on a specific set of principles designed to avoid this intractable situation, yet we’ve stretched and gerrymandered it to the point where it provides the putative justification for the exact opposite of its intentions.Report

  14. Avatar E.D. Kain
    Ignored
    says:

    Jason – liberals aren’t bothered by crony capitalism when the ends justify the means.Report

    • Avatar ThatPirateGuy in reply to E.D. Kain
      Ignored
      says:

      It’s true absolutely no liberals opposed the mandate when the law was being debated. None of them wanted a public option and there was no big kabuki dance that let the senate kill it because they never wanted it.

      The democratic house never argued these issues vigorously. Liberals are all hacks.

      Or E.D. is being very unfair here and liberals simply don’t trust conservatives and libertarians on the constitution or facts generally as far as they can throw them. It could be that we think conservatives and libertarians make things up and call anything you don’t like unconstitutional tyranny.Report

  15. Avatar Boonton
    Ignored
    says:

    This is all well and good but there’s a problem, the HCR bill has no such ‘command’. It explicitly states that no criminal or even civil penalty attaches to the failure to buy health insurance. At best it may be considered a universal tax that allows a deduction if you have coverage.

    Legally I agree commands are different from taxes and penalties. Consider a town that has a street that says “no parking from 8 pm to 8 am” and the fine for illegal parking is $25. Consider a different town that has a public parking garage that charges $25 for overnight parking. Economically both towns seem the same, if you don’t care about the $25 ticket you might opt to just pay the fine and park illegally.

    But legally they are not the same. The town with the garage is offering a service. The town with the sign is making a command. If you park illegally you cannot say you’re a law abiding citizen. Because the penalty is so small that may not matter to you but it does matter in the sense that a command is different from a tax or an offer.

    Critics of the HCR are kidding themselves IMO if they think they can override the will of the people with getting a judge to rewrite the law off the books.Report

    • Avatar Jason Kuznicki in reply to Boonton
      Ignored
      says:

      This is all well and good but there’s a problem, the HCR bill has no such ‘command’. It explicitly states that no criminal or even civil penalty attaches to the failure to buy health insurance. At best it may be considered a universal tax that allows a deduction if you have coverage.

      This strikes me as a distinction without a difference. Consider that on these terms, we could levy a tax of $1,000,000 per year on anyone who did not perform forced plantation labor. We could trumpet how there’s no criminal or even civil penalty to our system — it’s just a tax, after all! Some would pay; the rest would work.

      (Those who didn’t pay the tax would be tax evaders, and we all know what happens to them, but let’s not connect too many dots if we can possibly avoid it…)

      I realize full well that no one is proposing what I’m saying here. I also realize that cultural norms would probably prevent it. I just wonder why it is that we are so eager to claim, despite all that, that this setup would be constitutional. Doesn’t that amount to an admission that you’ve found a giant, gaping flaw in our Constitution?

      Happily, I don’t think there is such a flaw, and the command/prohibition distinction seems to do some very, very useful work.Report

      • Avatar Boonton in reply to Jason Kuznicki
        Ignored
        says:

        Only problem with your hypothetical is that such a law would probably be banned as ‘involuntary servitude’. Substance often trumps form in economics and accounting but in law the reverse is often true. For example a corporation with a single shareowner is different than a sole proprietership even though ‘substance wise’ they are a guy who owns his own business.

        Also you failed to note that the HCR law actually prohibits the IRS from using criminal sanctions against those who don’t pay, even against filing civil leins on them. It seems like if you’re a ‘tax evader’ the worse that’s going to happen is the IRS is going to dock your tax refund.Report

        • Avatar Jason Kuznicki in reply to Boonton
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          says:

          It probably would be banned as involuntary servitude. But where then is the boundary? What sum of tax money? What set of commands? I don’t see a bright line here, at least not beyond the one I’ve already identified. That lack of bright line strikes me as a serious problem.

          It remains a problem even if all that happens is docking one’s tax refund. Sooner or later, that burden may become difficult to pay; people may resist on principle; the pressure may increase on the margin for harsher penalties and definitions surrounding tax evasion. None of these is terribly pressing or horrifying in itself, but in time they may do serious damage to the relationship between the individual and the state. We begin to look increasingly like debt peons, do we not?Report

          • Avatar ThatPirateGuy in reply to Jason Kuznicki
            Ignored
            says:

            Shame if someone put grease on this here slope. It just might get slippery.Report

            • Avatar Jason Kuznicki in reply to ThatPirateGuy
              Ignored
              says:

              Are we to condemn the search for judicial rules itself, for fear of committing a slippery slope fallacy? If so, we’ll have to throw out basically all Anglo-American law, constitutional or otherwise.

              All I’m asking for is a boundary. That shouldn’t be hard, should it?Report

              • Avatar ThatPirateGuy in reply to Jason Kuznicki
                Ignored
                says:

                By virtue of the 16th amendment congress has the power to tax income. Unless you are trying to tell me that all deductions like the mortgage deduction are unconstitutional why are we having an argument about the constitution filled with slavery strawman?

                There is no command. Only tax benefits for performing an action deemed beneficial to society like being a home owner, getting married, or getting an education. Indeed as boonton mentioned this particular tax benefit is less dangerous than a normal one as if I tried to deduct a mortgage donation that I don’t qualify for I will suffer criminal and financial penalties. That doesn’t apply with the ACA.

                The solution to making sure that the ACA doesn’t do terrible things is to not change it to do those things.Report

              • Avatar Jason Kuznicki in reply to ThatPirateGuy
                Ignored
                says:

                By virtue of the 16th amendment congress has the power to tax income. Unless you are trying to tell me that all deductions like the mortgage deduction are unconstitutional why are we having an argument about the constitution filled with slavery strawman?

                Slavery isn’t a strawman. It’s a straightforward inference from the legal theories I’m hearing advanced here. The defense is offered that the theory won’t lead to the practice, but if that’s the case, then the theory is either incomplete or incorrect. Which one is it?

                The Sixteenth Amendment hasn’t a thing to do with it, either, because what’s being taxed here is not income. It’s inactivity. I could be retired, have zero income, and I’d still face a tax penalty under this law, unless I agree to buy insurance. That’s not an income tax. That’s a direct command, with a fine as the consequence for noncompliance. You may defend it as such if you like, but you can’t call it an income tax.Report

              • Avatar Boonton in reply to Jason Kuznicki
                Ignored
                says:

                Actually it sounds to me like a poll tax with a deduction for those who secure insurnace.

                As for a ‘tax on inactivity’, again how is that different from the mortgage interest deduction. If I have a mortgage, my income isn’t taxed (as much). If I don’t, it is.

                The title of this thread is “economic commands are different from political commands”. They are. “No Parking” is a political command that may or may not have a punishment behind it. “Parking for $25” is an economic one.

                Likewise a ‘tax penalty’ isn’t a command. It’s a tax penalty. OK maybe you can argue that punishments can get so excessive that they become something unconstitutional. Life in prison for illegal parking or a $1Billion fine would probably cross some type of line. Nothing in the Health Bill even gets near that, though, so that’s a red herring.Report

              • Avatar Jaybird in reply to Boonton
                Ignored
                says:

                Speaking from memory, my mortgage required effort to obtain.Report

              • Avatar Jason Kuznicki in reply to Boonton
                Ignored
                says:

                Again, I’m really not sure you’re grasping some distinctions I regard as fundamental.

                As I explained in the post, a prohibition on a given act is not a command. It’s a prohibition. A prohibition is when the government tells you “you must not do A, B, or C.” This leaves the rest of your liberty relatively intact, because you still have literally everything else in the world left to do. It only takes away some liberty, and that portion might just be something that can’t be enjoyed in equal freedom with others anyway.

                Commands however work very differently. As long as you are under a command, no other options are open to you. The command to buy insurance of a particular type precludes, among other things, innovation in the insurance industry.

                To focus on the penalty for noncompliance, rather than on the alternative choices people should be allowed legitimately to make, trivializes the distinction between prohibition, tax, and command. It also effaces what’s really being lost here.Report

              • Avatar ThatPirateGuy in reply to Boonton
                Ignored
                says:

                Jason

                Please tell me how the child tax credit does not fit into your definition of command. By not having children I am forced to pay 1000 dollars more in taxes per year. Not having children is definitely non-activity.

                http://www.taxpolicycenter.org/briefing-book/key-elements/family/ctc.cfmReport

              • Avatar Jason Kuznicki in reply to Boonton
                Ignored
                says:

                I think I see the trap you mean to set for me — either we already have commands of the type that I fear, or else I’m actually (and mysteriously) fine with a whole lot of unjustifiable differential taxation.

                As I’m someone who has long supported a flat tax without any deductions, I don’t find this much of a trap. I’m certainly not being a hypocrite, anyway.

                Are income tax deductions or credits for particular actions constitutional? I think a lot would depend on their purpose and structure. The EITC is intended and structured as a welfare benefit, not as a command to have children. Although I’d do away with it (and replace it with a guaranteed minimum income/negative income tax), I can’t say I have quite the same objections to it.Report

              • Avatar ThatPirateGuy in reply to Boonton
                Ignored
                says:

                I’d like to see you address this in a longer form, but as I am not in a position to command you I understand if you decline.

                😉Report

              • Avatar Boonton in reply to Boonton
                Ignored
                says:

                Err This seems like a very weak argument Jason.

                With a prohibition I can’t do one thing but I can do everything else. So ‘don’t do C’ means I can do A, B, D, E…

                But commands seem like ‘just one thing’ too. “Do C” doesn’t seem to inhibit me from doing A, B, D, E… and so on.

                Of course you can say if C is some horrendous burden like “contribute 100,000,000 hours to community service” you are basically inhibited from doing anything else. But then if C is “don’t make any money” a prohibition can be just as much a burden on liberty.Report

              • Avatar Boonton in reply to Jason Kuznicki
                Ignored
                says:

                And actually not buying insurance is not an ‘inactivity’ when you have a law prohibiting discrimination against pre-existing conditions. It’s basically offloading a liability onto your fellow citizens.

                Perhaps an interesting reading of the bill would be to say not paying the tax or penality basically voids your right to participate in the entire law. Hence you cannot use the law to demand that your premiums not be raised to adjust for your failure to buy insurance and your pre-existing conditions. If you want to ‘opt out’ you really have to opt out.Report

              • Avatar James Hanley in reply to Boonton
                Ignored
                says:

                Boonton, I understand the logic of this argument, but I find it very disturbing. Essentially it means that if we write our laws carefully enough, we can turn any inactivity into an activity, hence require people to take certain steps and wholly deny them the ability to opt out. Once we’ve done that, is there any real theoretical limit to government’s authority?Report

              • Avatar Boonton in reply to Boonton
                Ignored
                says:

                James, I think there’s a problem with ‘theoretical limits’….when discussing whether an actual policy is Constitutional courts often don’t define theoretical limits. A 60% income tax rate may be high, but it isn’t unconstitutional. If a group of libertarians tried to challenge such a tax rate on grounds that it was slavery or something like that the courts would rightly rule against them.

                But at the same time that is NOT saying there’s absolutely no theoretical limits to income taxation. A slavery argument or punishment without due process argument would probably be effective at tax rates over 100%. Maybe even at, say, 99.9999%. There is a tradition in our jusitice system that says courts do not issue advisory opinions. If congress wants to start passing 100%+ tax rates the courts wait to hear the cases before devising a system to analyze their Constitutionality.

                I’m not saying there’s no value in thinking about theoretical limits here but there’s a limit on how useful the limits are. A hypothetical law putting a million dollar penalty fee on everyone who fails to do one headstand per month may not seem to be ruled out by what I’m saying but that doesn’t mean you should assume its ruled in.Report

              • Avatar Michael Drew in reply to Boonton
                Ignored
                says:

                Responding to James – Why would we think that merely by saying that inactivity can now be regulated would we conclude that provisions that limit regulation of activity would apply just the same to regulation f inactivity. The justification for the mandate, to the extent it is regulation of inactivity and not simply a tax, is not that the Constitution says nothing about not regulating inactivity so were just going to help ourselves down that path starting now.. Rather, it is the contention that the regulation of this inactivity is a valid use of the Commerce Clause. Just as with any regulation od activity, any inactivity that the federal government wants to regulate would have to be shown (on challenge) to be part and parcel of the regulation of interstate commerce. As far as i can see, the government can equally contrive to come up with spurious ideas about types of activity to try to regulate under that justification as they can types of inactivity. All such attempts are still limited by a judge’s prerogative to say that they don;t relate sufficiently to interstate commerce to pass Constitutional muster. I do understand the claims being made here about the cost of the mandate to pure liberty (though I think then the discussion needs to revert back to a functional examination of how the mandate will actually be applied in practice, at which time we’ll find it to be very tax-like indeed), but as far as I can tell the Constitutional concern about the slippery slope with respect to activity/inactivity under the commerce clause simply doesn’t exist. That limitation applies just as well to regulation of inactivity as to regulation of activity, or to put it another way, the slope is more or less equally slippery on either side. What specific laws will be upheld or struck down as sufficiently or insufficiently related to the regulation of interstate commerce to be justified by the Commerce Clause is, of course, up to the judges in whose courts such laws are challenged. But to Jason’s question that I’ll paraphrase as, “Under the logic being used to justify the regulation of inactivity that we call the individual mandate provision of the ACA, what can’t Congress do?”, the answer is simple: anything not related to the regulation of interstate commerce — the same limitation that prohibits the government from various kinds of regulation of positive activity.

                If Jason or you want to find a prohibition on regulation of inactivity to be simply implied by the basic assumptions of the Constitution itself, that is perfectly fine, but I don’t see any reason why we should presume that the Commerce Clause in particular can’t be understood to limit regulation inactivity just the way it does regulation of activity.Report

              • Avatar Michael Drew in reply to Boonton
                Ignored
                says:

                Never good when one has to correct the first sentence of a comment, but this:

                “Why would we think that merely by saying that inactivity can now be regulated would we conclude that provisions that limit regulation of activity would apply just the same to regulation of inactivity[?]”

                should have had a “not” as so:

                “Why would we think that merely by saying that inactivity can now be regulated we would conclude that provisions that limit regulation of activity would not apply just the same to regulation of inactivity?”

                Still not the best sentence I’ve ever written, but at least it’s trying to say what I mean that way.Report

              • Avatar Jason Kuznicki in reply to Boonton
                Ignored
                says:

                Err This seems like a very weak argument Jason.

                With a prohibition I can’t do one thing but I can do everything else. So ‘don’t do C’ means I can do A, B, D, E…

                But commands seem like ‘just one thing’ too. “Do C” doesn’t seem to inhibit me from doing A, B, D, E… and so on.

                Of course you can say if C is some horrendous burden like “contribute 100,000,000 hours to community service” you are basically inhibited from doing anything else. But then if C is “don’t make any money” a prohibition can be just as much a burden on liberty.

                As I said, if you are already commanded to obtain health care in one of the government-approved ways, any other ways are off the table forever. That’s where the loss of liberty comes in.Report

              • Avatar Boonton in reply to Boonton
                Ignored
                says:

                As I said, if you are already commanded to obtain health care in one of the government-approved ways, any other ways are off the table forever. That’s where the loss of liberty comes in.

                This isn’t very impressive IMO. If the gov’t can command you to do something then it might inhibit your liberty. Yea, if the gov’t can prohibit you from doing something it might also infringe on your liberty. Likewise if the gov’t can pass laws beginning with the letter ‘C’ it may infringe on your liberty. The question though is the given law in question an infringement on liberty?

                This is why I don’t really like making too much of the question “what are the limits”. I think there are limits on what the gov’t can command just as there are limits on what the gov’t can prohibit. If a given law is not against those limits, though, its defenders don’t have to articulate what exactly those limits are. For example, I think there is probably a point where income tax rates can cease being permitted income taxes and start becoming punishment of some sort (such as rates in excess of 100%). That didn’t make Bill Clinton’s tax increases (or George Bush’s tax increases, if Obama’s extension failed) a violation if they couldn’t articulate a Constitutional theory laying out exactly what the unpermissible rates are.Report

              • Avatar Jason Kuznicki in reply to Boonton
                Ignored
                says:

                This isn’t very impressive IMO. If the gov’t can command you to do something then it might inhibit your liberty. Yea, if the gov’t can prohibit you from doing something it might also infringe on your liberty. Likewise if the gov’t can pass laws beginning with the letter ‘C’ it may infringe on your liberty. The question though is the given law in question an infringement on liberty?

                I submit that it is unimpressive. Sure! Now let’s take the next step: Why is it unimpressive?

                It’s unimpressive because neither you nor I can see innovations that have not happened yet. Now, those innovations will never happen. The logic of command is a self-fulfilling prophecy.Report

              • Avatar Boonton in reply to Boonton
                Ignored
                says:

                I submit that it is unimpressive. Sure! Now let’s take the next step:

                Then you examine the next step when and if it is ever taken. Because the next step crosses a line that doesn’t make the step before over the line. To use one of your silly hypotheticals, if the gov’t tries to command forced plantation labor then that’s over the line. That doesn’t make some unimpressive law today over the line because its the ‘first of a million steps’ towards ‘forced plantation labor’.

                Or use the tax rate example. Do you agree with me that, say, a 1,000% tax rate would be Constitutionally problematic? That it would cease to be just an ‘income tax’ and more involuntary servitude or punishment without due process? If so then isn’t a tax increase from 30% to 31% a ‘step’ on the way to that rate? Is that increase Constitutionally problematic?

                It’s unimpressive because neither you nor I can see innovations that have not happened yet.

                Is this a legal/Constitutional argument or a policy argument? Raising the tax rate from 30% to 31% may likewise choke off some innovation that is desirable but that’s a legislative consideration, not one for judges.Report

    • Avatar Scott in reply to Boonton
      Ignored
      says:

      Booton:

      So the “will of the people” can override the Constitution? Who cares what the gov’t calls it when they want the IRS (who will be collecting the money) to take my money. Neither name makes me feel any better about it.Report

      • Avatar ThatPirateGuy in reply to Scott
        Ignored
        says:

        I am fairly certain that that is not what Boonton is saying.Report

      • Avatar Boonton in reply to Scott
        Ignored
        says:

        The ‘will of the people’ isn’t there to make you feel better. Part of living in a democratic system is that you won’t like some of the decisions. But as far as the Constitution goes, there’s a power to regulate commerce and a power to tax and this relatively mild mandate seems well within it. Do you find it ironic that by your reasoning a universal system of forced Medicare for everyone would be more ‘free’ than the ‘mandate’ to buy private insurance?Report

        • Avatar Christopher Carr in reply to Boonton
          Ignored
          says:

          “Part of living in a democratic system is that you won’t like some of the decisions.”

          That is doubtlessly true, but isn’t it reasonable to say that the amount of decisions potentially disliked by citizens should be minimized by structural means? And, living in a democracy implies that citizens have the power to change the law. It seems here like you’re providing a justification for collectivism or for the tyranny of the majority.

          The entire point of the Constitution was to avoid this kind of situation by carefully delineating the powers the Federal Government had and allowing all others to go to the states. If I really really don’t like mandatory medical insurance, I don’t have to live in Iowa for instance, or I don’t have to live in Madison County. I can just cross the bridge to the next town or state. On the other hand, when the Federal Government mandates something, even in a functioning democracy, there is no escape from the tyranny of the majority.Report

          • Avatar Boonton in reply to Christopher Carr
            Ignored
            says:

            Majority != Tyranny of the majority.

            What if every state enacted a mandate and Iowa was the last? Would the people of Iowa be barred from enacting a mandate if they wanted because you want to live in a state without one? What about setting the BAL of 0.1 for defining a DUI or not having a sales tax? Does the last state have to hold out?

            Either a mandate is tyrannical or it isn’t. If it is then it should be the law anywhere, if it isn’t then a preference not to have one is just that. Go vote and if it works out for you great if not that’s the digs.Report

            • Avatar Christopher Carr in reply to Boonton
              Ignored
              says:

              That’s not the point. The point is that in a free country people should be allowed to do whatever they want as long as it doesn’t harm others regardless of whether it’s popular or not. Democracy is not a popularity contest. The Constitution exists to ensure it doesn’t become one. There are subsidiarity concerns which I’m afraid your argument severely underserves.Report

            • Avatar Boonton in reply to Boonton
              Ignored
              says:

              Actually no they shouldn’t. Most of the time driving 60 mph isn’t going to harm anyone, nor will running a red light when no one else is coming, nor is jaywalking, nor is failing to pick up after my dog, or opening a small business in my home, and so on. The Constitution did enshrine many individual freedoms as the foundation of our system of law and justice but it didn’t enshrine Ayn Rand’s objectivisim (do whatever you want provided it doesn’t infringe on me doing whatever I want).

              Again Tyranny of the Majority is something more than just ‘the Majority’. Just because a law is passed prohibiting you from doing something that seems relatively harmless in your opinion doesn’t automatically make you a victim of tyranny.Report

              • Avatar Jaybird in reply to Boonton
                Ignored
                says:

                Like gay marriage?Report

              • Avatar Boonton in reply to Jaybird
                Ignored
                says:

                Yes, except IMO gay marriage has a very good equal protection argument going on.Report

              • Avatar Jaybird in reply to Boonton
                Ignored
                says:

                One man’s very good argument is another man’s twisting the Constitution.Report

              • Avatar Boonton in reply to Jaybird
                Ignored
                says:

                Indeed, but some Constitutional arguments are better than others….like it or not. I’ve given anti-SSM people plenty of chances to show why the Constitutional arguments for SSM are bad….to date they haven’t done a great job. From what I’ve read of the various court cases actual lawyers who are getting paid to show why the Constitutional arguments are bad can’t seem to do much better.Report

              • Avatar Christopher Carr in reply to Boonton
                Ignored
                says:

                As Jason has very painstakingly argued in multiple posts now, all of those examples are prohibitions, not commands. The mandate is not a prohibition. It’s a command that I give some of my money to some companies that the government likes.

                I’m not suggesting that the Constitution was, is, or should be an objectivist document. My argument above about the freedom of individuals was more of an appeal to the kind of reason, compassion, and common sense articulated by John Locke and Adam Smith, which – without a doubt served as the intellectual basis for the founding of the republic.

                Perhaps I’m a bit too right-brained for these sorts of legal discussions, but I agree with Jaybird that one man’s good argument is another man’s twisting the Constitution. There is a word in Japanese, “herikutsu”, which has no good English translation. The best I can come up with is “convenient logic” – but the word is the equivalent of a logical fallacy like post hoc ergo propter hoc or a straw man argument there.

                The kind of reasoning that takes the words of a document to conclude the exact opposite of what was doubtlessly that document’s initial premise may be the basis for our legal code here, but some might consider the entire methodology to be spurious.Report

              • Avatar Jason Kuznicki in reply to Christopher Carr
                Ignored
                says:

                Thanks for understanding me. I sometimes worry that I’m not getting through when I get all abstract and stuff.

                One slight quibble. You write: “I’m not suggesting that the Constitution was, is, or should be an objectivist document.”

                And neither am I — the distinction between prohibition and command is, I think, at least implicit in Anglo-American law and in the Constitution particularly. But it was given its clearest formulation by F. A. Hayek, especially in chapter 10 of The Constitution of Liberty. The payoff? Ayn Rand despised Hayek!Report

              • Thanks, Jason. I’ll check it out.Report

        • Avatar Scott in reply to Boonton
          Ignored
          says:

          Booton:

          There is a big difference between not liking the decision and the law being unconstitutional. Also, There is quite a big difference between the gov’t forcing you not to act and forcing you to act. It may be a bold statement, but I simply do not believe that Wickard’s progeny support the gov’ts position on this matter.Report

          • Avatar Boonton in reply to Scott
            Ignored
            says:

            Are we keeping in mind that a tax is not a command? In the actual health bill there is no command to buy insurance. It is called a command because it’s effectively an ‘economic command’ in that not buying health insurance becomes less economically attractive to an individual because of the bill.Report

            • Avatar Scott in reply to Boonton
              Ignored
              says:

              Yes a tax is a command. What is the difference between a fine to discourage parking illegally and a tax on a pack of cigarettes to discourage smoking? There is none as both seek the same outcome which is to modify our behavior in some way via a monetary disincentive. Money out of my wallet is still money out of my wallet no matter what you call it.Report

              • Avatar ThatPirateGuy in reply to Scott
                Ignored
                says:

                By that reasoning the child tax credit is a command to have children. I can hardly think of a more imposing command. Jason clearly wanted to avoid this trap, why are you so eager to trigger it?

                And wouldn’t this make pretty much every tax deduction/credit unconstitutional? I am afraid I don’t see the court going with this reasoning.Report

              • Avatar Scott in reply to ThatPirateGuy
                Ignored
                says:

                TPG:

                Yes, a tax credit is a monetary incentive to engage in a particular behavior. The gov’t as the sovereign can choose to encourage certain actions/behaviors such as buying a house, having kids, or buying an electric car. But so what?Report

              • Avatar ThatPirateGuy in reply to Scott
                Ignored
                says:

                Thanks for completely justifying the constitutionality of the mandate.

                All the mandate does is encourage you to purchase insurance by increasing ones tax burden if they refrain from it.

                Just like everything you listed.Report

              • Avatar Boonton in reply to Scott
                Ignored
                says:

                By that reasoning my free speech is being inhibited because I don’t have the money to buy a massive media outlet like Fox News. If there’s no distinction between economic freedoms and political freedoms this is where you’re going to logically go.

                Just because a gov’t policy makes a certain choice more expensive doesn’t mean that the gov’t is prohibiting that choice. For example, Roe.v.Wade said the gov’t can’t prohibit abortion in the 1st trimester yet in every state abortions have to be performed by doctors, not nurses, not midwives, not med school drop outs. This makes abortion somewhat more expensive than it otherwise would be but that’s not the gov’t prohibiting abortion.

                I will agree that sometimes a policy can create so many economic burdens that it becomes a de facto legal command. If, say, the gov’t said that abortion doctors had to have an extra twenty years of med school, publish at least ten articles in peer reviewed journals and be nominated at least once for a Nobel Prize in medicine I’d say that is probably a legal ban on abortion trying to pretend to be ‘just economic policies’. But no just because a policy is ‘designed to influence behavior’ that is NOT the same as gov’t taking away your liberty.Report

            • Avatar Jason Kuznicki in reply to Boonton
              Ignored
              says:

              This is not how the government has chosen to defend the individual mandate in the courts. Rather than relying on the tax power for legal justification, it has chosen the commerce clause and the necessary and proper clause. That’s where the fight is actually happening.

              We may argue that the mandate, considered as a tax, might be constitutional, but these are not the grounds on which the law’s own crafters have chosen to defend it. So I’m not going to bother. It will not matter either way, and, at any rate, I am more familiar with commerce clause jurisprudence than I am with constitutional tax law.Report

              • Avatar Boonton in reply to Jason Kuznicki
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                says:

                Does it matter? If a law is defensible via two different clauses but the gov’t chooses to defend it on one clause but not the other is there some legal principle that the courts cannot consider the law’s Constitutionality via the other clause? I never heard of such a thing.Report

              • Avatar Jason Kuznicki in reply to Boonton
                Ignored
                says:

                It does matter, because clearly some folks who both (a) are sympathetic to the law and (b) know more than you or I … have already abandoned the route you propose, without so much as a fight.Report

              • Avatar Boonton in reply to Jason Kuznicki
                Ignored
                says:

                I wasn’t aware that the solicitor general has argued the case in front of the Supreme Court already. Perhaps you can provide a source of the gov’ts defense.Report

              • Avatar Scott in reply to Boonton
                Ignored
                says:

                Booton:

                DOJ attorneys are handing the HCR litigation in the lower Federal Courts as the role of the Solicitor General is to supervise and conduct government litigation in the United States Supreme Court. Surprising as it may be, the argument they made in their losing attempt in Va. was a commerce clause argument.Report

              • Avatar Boonton in reply to Boonton
                Ignored
                says:

                It would seem that the tax argument is also being used to defend the mandate. So yes people ‘smarter than me’ do indeed see it as a valid defense. Whether it was used in the most recent ruling I don’t know.Report

  16. Avatar Michael Drew
    Ignored
    says:

    Never good when one has to correct the first sentence of a comment, but this:

    “Why would we think that merely by saying that inactivity can now be regulated would we conclude that provisions that limit regulation of activity would apply just the same to regulation of inactivity[?]”

    should have had a “not” as so:

    “Why would we think that merely by saying that inactivity can now be regulated we would conclude that provisions that limit regulation of activity would not apply just the same to regulation of inactivity?”

    Still not the best sentence I’ve ever written, but at least it’s trying to say what I mean that way.Report

  17. Avatar Michael Drew
    Ignored
    says:

    Reposting from an above exchange where I respond when James Hanley asks, “if we write our laws carefully enough, we can turn any inactivity into an activity, hence require people to take certain steps and wholly deny them the ability to opt out. Once we’ve done that, is there any real theoretical limit to government’s authority?” as follows (plus some editing). Any thoughts as to how I am mistaken in this analysis would be welcome.

    Why would we think that merely by saying that inactivity can now be regulated would we conclude that provisions that limit regulation of activity would not apply just the same to regulation of inactivity? The justification for the mandate as command, to the extent it is regulation of inactivity and not simply a tax, is not that the Constitution says nothing about not regulating inactivity so were just going to help ourselves down that path starting now. Rather, it is the contention that the regulation of this inactivity is a valid use of the Commerce Clause, because failure to purchase health insurance is a decision with great consequences for health insurance markets, which, despite the ban on interstate policy purchases, operate on the basis of regional and even quasi-national risk pools. (I’m not endorsing that argument, nor even do I know that it is how defenders of the mandate would formulate it; it’s just a rough formulation for argument’s sake).

    Just as with any regulation of economic activity, any inactivity that the federal government wants to regulate pursuant to the Commerce Clause would have to be shown (on challenge) to be part and parcel of the regulation of interstate commerce. The point I have here is that I am having a hard time seeing why this particular Constitutional limitation on the regulation of activity doesn’t work just as well, at least in theory (as per James’ question above), as a limit on the regulation of inactivity. As far as I can see, the government can equally contrive to come up with spurious ideas about types of activity to try to regulate under that justification as they can types of inactivity. All such attempts are still limited by a judge’s prerogative to say that they don;t relate sufficiently to interstate commerce to pass Constitutional muster.

    I do understand the claims being made here about the cost of the mandate to pure liberty (though I think then the discussion needs to revert back to a functional examination of how the mandate will actually be applied in practice, at which time we’ll find it to be very tax-like indeed), but as far as I can tell the Constitutional concern about the slippery slope with respect to activity/inactivity under the Commerce Clause simply doesn’t exist. The limitation applies just as well to regulation of inactivity as to regulation of activity, or to put it another way, the slope is more or less equally slippery on either side. Or so it seems to me. What specific laws will be upheld or struck down as sufficiently or insufficiently related to the regulation of interstate commerce to be justified by the Commerce Clause is, of course, up to the judges in whose courts such laws are challenged.

    So to Jason’s question from another post that I’ll paraphrase as, “Under the logic being used to justify the regulation of inactivity that we call the individual mandate provision of the ACA, what can’t Congress do?”, the answer is simple: anything not related to the regulation of interstate commerce — the same limitation that prohibits the government from various kinds of regulation of positive activity.

    Now, this all does not answer the claim that, by definition, inactivity cannot ever be commerce, therefore it cannot be interstate commerce, therefore regulation of it is not a power granted to Congress by the commerce clause. I think that is a potentially strong argument. But to be clear: that is not the argument I mean to questioning here. here I am simply struggling to understand why, once we grant for the sake of argument that some inactivity may be regulable under the Commerce Clause, we should think that there is a more slippery slope relating to various kinds of inactivity that are less and less related to interstate commerce, as there is or was relating to various kinds of activity that had less and less relevance to interstate commerce.

    So to sum up, I’d say that if we want to say that a prohibition on the regulation of inactivity is simply implied by the basic assumptions of the Constitution itself, that is perfectly fine, and I don’t have much to say about such a claim. But in particular with respect to the Commerce Clause, I don’t see any reason in theory why we should presume that that provision couldn’t be understood to limit the particular instances of inactivity that might be regulated pursuant to it, if we find inactivity to be ever potentially so subject, in just the way it limits the instances in which positive activity may be so regulated. I wonder if anyone else does see such a reason.Report

  18. Avatar Herb
    Ignored
    says:

    “It puzzles me that liberals aren’t troubled in the same way by such rank crony capitalism.”

    Well, I am troubled by “such rank crony capitalism,” but I also recognize that this policy has a whole context where one side offered ideas, many of them bad, and the other side offered little more than yelled slogans of “tyranny/socialism!”

    Not saying that yelling “tyranny/socialism” is a bad idea in all contexts, but it was decidedly unhelpful in this one. Something to think about as you choke back the urge to say, “You can’t make me buy health insurance.”Report

    • Avatar Jason Kuznicki in reply to Herb
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      says:

      Fortunately, I haven’t the slightest urge to choke back that line. I’m going to say it loudly and clearly. By rights, you cannot do this. I may submit, but I won’t consent.Report

      • Avatar Herb in reply to Jason Kuznicki
        Ignored
        says:

        Very noble, but on a pure “picking your battles” calculus, maybe a little misguided. In the abstract, you have a point. But in the messy complexity of actual life, it’s a minor one.

        If your name is currently on a health insurance policy, you don’t have to submit. Because you already consented.Report

        • Avatar Jason Kuznicki in reply to Herb
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          says:

          I’d say that if there is no choice, there is no consent.Report

          • Avatar Herb in reply to Jason Kuznicki
            Ignored
            says:

            Well, that you don’t like the choices laid out before you doesn’t mean there is no choice. You are perfectly free to choose the no health insurance route. It’s never been a wise way to go, for your own health needs not to mention for those of us who pay our premiums, but it’s still an option. That the government made it a less attractive option is no great injustice. It is, by default, the less attractive option.Report

            • Avatar tom van dyke in reply to Herb
              Ignored
              says:

              Herb, for the young and basically healthy, our [government] medical safety net—the county health system[s]—has made no insurance an attractive health insurance option.

              I’m continually surprised that my UK penpals actually believe the USA lets its people die on the streets for lack of medical insurance. [Not surprised, really, since they get their news from the BBC, an unapologetic apologist for the NHS.]

              Americans have no such excuse, since they have eyes.

              Health insurance and health care have been made synonymous terms in our own media and political discussion, but we know this conflation is rhetorical, not real.

              So do the young folk who don’t buy health insurance. They know if they have a heart attack, get AIDS or cancer, or simply have a skiing accident, Uncle Sam will patch them up, and keep them going as well if it’s chronic.

              Young folk ain’t wise, but they ain’t stupid. America has a medical safety net, although you wouldn’t know it by all the talk.

              Does it suck? Sure, it sucks. Safety nets should suck, or else there’s no reason to prefer the better alternatives, like actually buying health insurance even when you’re young and healthy.

              Geez.Report

              • Avatar Herb in reply to tom van dyke
                Ignored
                says:

                “They know if they have a heart attack, get AIDS or cancer, or simply have a skiing accident, Uncle Sam will patch them up, and keep them going as well if it’s chronic.”

                Weird…this seems to be the complete opposite of how it actually is. Uncle Sam doesn’t pay these people’s medical bills; the insured do. As for how the government “has made no insurance an attractive health insurance option” not sure how they could have done that when they just passed the individual mandate. Correct me if I’m wrong, but doesn’t the individual mandate mean that “no insurance” is no longer even an option, attractive or otherwise?

                But we do seem to be in agreement that the uninsured are more likely to be freeloaders than rugged individualists making noble decisions that don’t affect anyone else.Report

              • Avatar Christopher Carr in reply to Herb
                Ignored
                says:

                “Weird…this seems to be the complete opposite of how it actually is. Uncle Sam doesn’t pay these people’s medical bills; the insured do.”

                Correct me if I’m wrong, but I think you’re arguing two sides of the same coin here. As the system currently is, hospitals cannot simply let people die on the streets, so they patch up broken people who have no insurance and in exchange those people just go massively into debt. This is probably more desirable than death for those individuals with no insurance, but for the system it’s pretty unsustainable.

                As for how this all relates to the individual mandate, financially non-compliance presents an extremely tiny burden on the non-complying individual – I don’t have the figures with me, but I think it’s a fine less that a thousand dollars. So, “freeloaders” may very well remain.

                The more important point is that to correct the free-rider problem of the existing system, HCR commands those free-loaders to give their money to a favored corporation. Not only is this bad because it will only change our broken broken system in a manner of degree and not kind, but it also takes the unprecendented legal step of legislating an economic command – you give this amount of money to this company or suffer the consequences.Report

              • Avatar Herb in reply to Christopher Carr
                Ignored
                says:

                “it also takes the unprecendented legal step of legislating an economic command – you give this amount of money to this company or suffer the consequences. ”

                Really? Hmmmm….

                The language of the law:

                “Sec 5000A. REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE

                “(a) REQUIREMENT TO MAINTAIN MINIMUM ESSENTIAL COVERAGE – An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.””

                No mention of how much money I must pay or to whom. Oh, it defines “minimum essential coverage” alright, but doesn’t define it as “buying insurance from corporations.” Indeed, “minimum essential coverage” is so large a box that it contains the guy who gets his insurance through his employer, the lady who shops on the open market, AND the retired Vet on Medicare and a VA plan.

                If you can’t afford insurance, there’s an exemption.

                There’s even a religious objection exemption, probably designed for the Christian Scientists, but I don’t see why Libertarians couldn’t sign up for that too. After all, from what I’ve seen, their objections have little to do with their medical needs or their “minimum essential coverage” status and everything to do with their philosophical beliefs.Report

              • Avatar Christopher Carr in reply to Herb
                Ignored
                says:

                I can’t really speak for libertarians here, but my objections generally stem from what I see as a dangerous legal precedent that is largely unrelated to fixing the health insurance market.Report

              • Avatar Boonton in reply to Herb
                Ignored
                says:

                As for how the government “has made no insurance an attractive health insurance option” not sure how they could have done that when they just passed the individual mandate. Correct me if I’m wrong, but doesn’t the individual mandate mean that “no insurance” is no longer even an option, attractive or otherwise?

                This is where the economic aspects of the bill get confused with political language about the bill. The bill DOES NOT mandate insurance. An actual mandate would make a person who chooses not to get insurance (for whatever reason) a person who is breaking the law. It’s possible to break the law and face a serious criminal penalty (murder), a minor penalty (parking in a no parking zone) or even no penalty at all. What the law does is make it slightly expensive to choose to have no insurance. This is called a ‘mandate’ in political debate but it’s really not.

                In fact, when you consider it you might as well call the mortgage interest deduction a ‘mandate to buy a home on credit’. After all the difference the mortgage interest deduction makes for most people in their taxes is a lot more than the tax/penalty that would be incurred by violating the ‘mandate’ of the health bill.Report

              • Avatar Jason Kuznicki in reply to Boonton
                Ignored
                says:

                I have yet to hear any of those using the “it’s not really a mandate, just a tax” defense explain why the law’s defenders in court have not adopted their reasoning.

                “They really ought to” is not an answer to the question. To be honest, I don’t have an answer either, but until such time as we have one, I think the debate has reached an impasse. Perhaps it’s in some of the briefs for one of the various challenging cases, but if so, I haven’t seen it yet.Report

              • Avatar Boonton in reply to Jason Kuznicki
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                says:

                I did actually post that link from the NYT that said the administration was using the tax argument in court. (It also noted that the tax argument was politically awkward since Obama had said the bill did not introduce new or raise existing taxes to pay for it) So I’m not sure what you’re talking about here.

                I’d like to hear you explain why and how its a mandate when it provides no criminal status for those opting not to have coverage, does not define the penalty/tax as a fine, has the IRS (our taxing agency) rather than Justice Department (our law enforcement agency) administering its collection etc. By this reasoning why wouldn’t the mortgage deduction be also a ‘mandate’ to buy homes on credit? Tobacco taxes a mandate not to smoke?Report

              • Avatar Jason Kuznicki in reply to Boonton
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                says:

                My apologies, I missed that comment and link. I was aware that they floated the idea, but my understanding was that it hadn’t made it into the legal case.

                The problem with this tax is that a tax can’t be merely punitive. It can’t be a tax in name, but a penalty in fact. As Ilya Somin puts it:

                If any regulatory measure with a monetary penalty for refusal to comply is considered a tax, then many of Congress’ other powers under Article I of the Constitution would be superfluous, since Congress could essentially regulate anything that fell within the subject matter of this clause simply by imposing money penalties on those who fail to comply, coupled with prison sentences for those who refuse to pay the money… Even more importantly, a financial penalty for failure to obey the law is not seen as a “tax” in ordinary language either today, or at the time of the Founding. The text and original meaning of the Constitution therefore cut against the view that the health insurance mandate is a tax.

                Even if the mandate does count as a tax, it still can’t be justified under the Tax and Spending Clause because it does not pay the national debt, provide for the common defense, or promote the general welfare of the nation.

                It’s not providing for the general welfare, because its intent is simply to punish miscreants. And, as Randy Barnett writes,

                Now there are cases that say (1) when Congress does not invoke a specific [i.e., enumerated constitutional] power for a claim of power, the Supreme Court will look for a basis on which to sustain the measure; (2) when Congress does invoke its Tax power, such a claim is not defeated by showing the measure would be outside its commerce power if enacted as a regulation (though there are some older, never-reversed precedents pointing the other way), and (3) the Courts will not look behind a claim by Congress that a measure is a tax with a revenue raising purpose.

                But I have so far seen no case that says (4) when a measure is expressly justified in the statute itself as a regulation of commerce (as the NYT accurately reports), the courts will look look behind that characterization during litigation to ask if it could have been justified as a tax, or (5) when Congress fails to include a penalty among all the “revenue producing” measures in a bill, the Court will nevertheless impute a revenue purpose to the measure.

                Report

              • Avatar Boonton in reply to Jason Kuznicki
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                says:

                The problem, though, is that the tax is not ‘merely punitive’. If a person opts not to get health insurance, they pay the tax which contributes to paying off the national debt (from the subsidies given to those who can’t afford insurance). If they opt to buy insurance they presumably will help lower insurance rates which lessens the need for subsidies.

                I understand better your difference between acceptable political commands and ‘economic commands’ but you’re in an awkward position in that the Constitutional specifically allows a range of ‘economic commands’. Import quotas, subsidies, patents, taxes etc. were all features of early American government. Sometimes they were based on defendable economic theories, sometimes they were just about naked special interest groups pandering, and sometimes they were based on totally crackpot ideas but the Constitution puts most of the judgement about this in the hands of the legislature rather than the courts.Report

              • Avatar Jason Kuznicki in reply to Boonton
                Ignored
                says:

                the Constitutional specifically allows a range of ‘economic commands’. Import quotas, subsidies, patents, taxes etc. were all features of early American government.

                Each of these are prohibitions or taxes, not commands. They don’t tell you “perform this specific action.” They say either “refrain from performing this specific action” or “pay this sum of money.”

                Granting Congress powers of this type is a much smaller set of concessions than granting them the power to command particular actions. The Cato brief that was just issued yesterday seems to address this much more clearly than I’ve been doing, although I haven’t finished reading it yet. (It doesn’t address tax arguments, unfortunately. I’d still like to know more about those.)Report

              • Avatar Jason Kuznicki in reply to Jason Kuznicki
                Ignored
                says:

                Also, why are my comments all getting bumped to the end of the thread?Report

              • Avatar Boonton in reply to Jason Kuznicki
                Ignored
                says:

                Each of these are prohibitions or taxes, not commands. They don’t tell you “perform this specific action.” They say either “refrain from performing this specific action” or “pay this sum of money.”

                Subsidies are not taxes or prohibitions. Patents likewise are not prohibitions but a grant of a property right on the patent holder (if I infringe on your patent you have to sue me, not call the FBI).

                Granting Congress powers of this type is a much smaller set of concessions than granting them the power to command particular actions.

                It would seem the opposite. I wouldn’t want the gov’t to order me to ‘pick twenty bales of cotton’ but if the gov’t had a policy that made choosing to pick cotton more economically advantageous (say by issuing land grants to agricultural colleges, import quotas on foreign cotton, granting patents to manufacturers that invent new things to do with cotton etc.) I would not consider that as great an infringement on liberty.Report

              • Avatar Pat Cahalan in reply to Jason Kuznicki
                Ignored
                says:

                Keep in mind I’ve already said I think the mandate is a bad idea on other grounds…

                > The problem with this tax is that a tax can’t be merely punitive.
                > It can’t be a tax in name, but a penalty in fact.

                It’s not, by and large, a penalty. It’s really just an escrow account.

                If you’re uninsured, and you go to the hospital, the hospital is going to provide you care – this is a behavior we actually want * as a society. However, since you’re uninsured, the hospital needs to recoup the cost of treating you by cost-shifting your expenses to other users of the hospital (either the insured, or the fantastically wealthy self-insured). This is of course unfair to the responsible citizens.

                The economic burden is thus being shifted back to the free riders**.

                * This is a topic for another thread, if you consider it debatable.

                ** One can make two cases against this.

                First, that it applies the burden (for the specific unlucky free-riding bastard who got sick) to a class of people (all the free-riders who haven’t bought insurance, even if they’re lucky and don’t need it). I personally don’t find this to be a very compelling counterargument, but that’s largely because I find free-riding contemptible. That’s obviously not a legal position on my side, of course. There are plenty of Constitutional ways to be a gigantic prick that are certainly legal if philosophically contemptible. However, even from a legality standpoint, I don’t believe that the “penalty” is particularly onerous.

                Second, that people ought to be able to opt-out of the whole deal and that society, as a whole, doesn’t have the right to put you into this system by default. The problem is that this conflicts with *, above. Your right to refuse to be a part of the health care system cannot be currently supported within the frame of the health care system, and thus (should we entertain it), we’re going to wind up screwing people who want to be in the system. Someone who wants care should not have to prove that they haven’t opted-out in order to get care, and most systemic opt-out programs would present this as a major exception scenario. This of course could be handled, but the system just isn’t engineered that way at the moment.Report

              • Avatar Boonton in reply to Pat Cahalan
                Ignored
                says:

                Technically the hospital would bill you, sue you and secure a judgement against you if you did not bother to insure yourself and ended up in the ER sick. Those who are very wealthy (such as the Facebook founder guy) could simply self insure writing the hospital a check for whatever emergancy expenses they incur, even if its a million dollars.

                I do think it works as a tax to fund insurance for those who are relatively poor. Tax funds would help offset the cost of subsidies. Those motivated to buy insurance to avoid the tax are likely those who are not very sick. Such people would lower insurance rates by coming into the pool so they are indirectly making the costs of subsidizing insurnce for the poor less costly.Report

              • Avatar Boonton in reply to Jason Kuznicki
                Ignored
                says:

                Jason, it seems to me like you’re fighting a war against the title of your own post. “Economic Commands are Different from Political Commands or Taxes”…..you seem to be saying in your title that Political Demands are wrong (‘you must buy a house on credit’, ‘you must buy health insurance’, ‘you must buy a pink cupcake from Starbucks every 3rd Tuesday of the month’) . But ‘economic commands/taxes’ are ok. If the gov’t subsidizes Starbucks cupcakes to make buying them more attractive, if the gov’t subsidizes home loans and taxes renters, etc. that’s ok.

                Yet you change pace and ignore the actual law…..where is the mandate? It seems if you’re willing to pay the penalty, tax or whatever you call it you’re not a law breaker. Why, then, is this not a relatively mild ‘economic command’?Report

              • Avatar Jason Kuznicki in reply to Boonton
                Ignored
                says:

                To be frank, I have yet to see you demonstrate any understanding of the title of the post, so I am unsurprised that you have continued to get it wrong.

                As I explained, political commands are those given to the citizens for political ends — you may be forced to serve on a jury; you may be forced to perform military service. These are actually… just fine! They’re part of what a constitution is supposed to do. What’s more, our existing political commands are all either spelled out directly in the constitution or else are fairly solid inferences therefrom. As a further defining characteristic, none of these political commands are made with any proximate economic goal in mind. They are all about setting up and maintaining a particular form of government that observes basic western/liberal norms. (This may have good economic effects, but these are very much in the background and are not the object of the law.)

                Economic commands are not good. Economic commands are specific directives, like “Buy a pink cupcake from Starbucks,” or “Pick twenty bales of cotton.” These are NOT OKAY. They are more liberty-diminishing than taxes or prohibitions (q.v.). They arguably set us on a very dangerous path, and the reductio ad absurdam of economic commands runs us directly into the Thirteenth Amendment. We are not meant to be the pawns of Congress.

                Taxes are okay by me. Congress has the power to tax, provided that it’s for certain clearly defined purposes. This is an enumerated power, and while I might disagree with certain taxes or tax levels on policy grounds, I can’t disagree with very many of them on constitutional grounds.

                Prohibitions are potentially okay as well. Congress has the power to regulate interstate commerce, and doing so clearly implies that it may prohibit certain actions. It’s easy to think of invidious prohibitions, and there are arguably constitutional reasons for opposing many of them. But prohibition in the abstract is something I can’t argue with.Report

              • Avatar Boonton in reply to Jason Kuznicki
                Ignored
                says:

                Or another ‘mandate’ is the tax deduction for giving to charity. The logic here is not that its simply punative to those who don’t like to donate. The defendable rationalle is that those giving to charity are lessening the need of the gov’t to provide welfare and other services therefore they get a tax deduction because, in a sense, they are taking some of the problems off govt’s plate.Report

              • Avatar Pat Cahalan in reply to Boonton
                Ignored
                says:

                > The logic here is not that its simply punative to those who don’t
                > like to donate.

                My argument against charitable donations being deductible is that generally I have no guarantee that the charity is going to be providing welfare or other services commensurate with your donation.

                I’m not really keen on giving you $10,000 off your reportable income because you donated that $10,000 to a church where 65% of their donations goes to proselytizing instead of feeding the poor 🙂Report

              • Avatar Jaybird in reply to Pat Cahalan
                Ignored
                says:

                I daresay that’s still a better return than one gets from the gummint.Report

              • Avatar Boonton in reply to Pat Cahalan
                Ignored
                says:

                Even so your tax bracket is probably not higher than 35%. If you didn’t make that donation you wouldn’t be giving the gov’t $10K in added taxes but at best 35% of $10K. Even if your charity spent 65% on proselytizing and 35% on doing stuff to help offset the gov’ts welfare it’s an even swap.

                Of course most charities do a lot better than 35% so it’s likely that 90% or more of that $10,000 will be spent in some way to help society whereas only $3500 would have gone to the gov’t in taxes….and what % of that $3500 is spent really helping the poor versus subsidies to agribusiness, overseas wars, and locking up people who smoke pot?

                The real problem IMO comes from fact that most charitable giving would happen anyway. For everyone who gives $10K to save $3.5K there’s probably two or three other people who would have given $10K anyway who now get $3.5 off.Report

              • Avatar Boonton in reply to Jason Kuznicki
                Ignored
                says:

                Economic commands are not good. Economic commands are specific directives, like “Buy a pink cupcake from Starbucks,” or “Pick twenty bales of cotton.” …

                These seem like just the set of political commands that are not allowed by the Constitution. I think the confusion here is that ‘political commands’ can sound a lot like economic ones. ‘Serve on a jury’ is, basically, saying ‘you can’t go to work today but instead you have to work on the gov’t jury for like $5 a day’. I agree political/economic commands are problematic and that they are rightly limited in the Constitution.

                Where I’ve been confused, though, is economic incentives. When you have something that’s not an economic command (donate to charity, buy a home on credit, buy domestic goods rather than imported ones subject to a tariff) but is a decision you make because various gov’t policies have made the decision more financially appealing to you. I’ve been thinking that you’ve been lumping those in with ‘economic commands’ because this is what the ‘insurance mandate’ takes the form of. You aren’t required to buy insurance in the sense that you’re required to serve on a jury or register for selective service. Simply not buying insurance is less financially appealing with the law than without it.Report

              • Avatar Jason Kuznicki in reply to Boonton
                Ignored
                says:

                These seem like just the set of political commands that are not allowed by the Constitution…

                Does your polity’s very functioning require cupcakes from Starbucks? If so, you have an interesting vision of politics. We distinguish economic commands from political commands not through their enforcement mechanism, but through their goals.

                Political commands aim at setting up or maintaining a polity. Economic commands aim at making us richer or better off materially. Perhaps buying cupcakes from Starbucks would do this, but even so, we can’t allow this type of legislation. If we did, it would amount to a grant of plenary power to Congress, not merely to regulate, but to direct the entire economic forces of the nation.

                As to incentives, you are right that there is little bright line between them and economic commands. Hayek admits as much; his words might be instructive here:

                The important difference between the two concepts [i.e., general laws and specific commands] lies in the fact that, as we move from commands to laws, the source of the decision on what particular action is to be taken shifts progressively from the issuer of the command or law to the acting person. The ideal type of command determines uniquely the action to be performed and leaves those to whom it is addressed no chance to use their own knowledge or follow their own predilections. The action performed according to such commands serves exclusively the purposes of him who issued it. The ideal type of law, on the other hand, provides merely additional information to be taken into account in the decision of the actor. (The Constitution of Liberty, University of Chicago Press, 1960, p 150.)

                By these terms, the mandate falls somewhere in between, I think. But by its constitutional justification, the way lies open to plenary power. At least, I find it hard to conceive of any other alternative.Report

              • Avatar Boonton in reply to Jason Kuznicki
                Ignored
                says:

                On the contrary, the insurance mandate seems to fall pretty clearly on the side of the those who are the actor (the person who chooses to buy or not buy insurnace).

                Imagine an alternative universe where the penalties were more in tune with, say, not withholding or paying social security taxes or what states do to those who let the insurance on their cars lapse. That would seem to be closer on the spectrum to your ‘economic commands’ rather than just laws that create economic incentives that may or may not induce a particular decision.Report

              • Avatar James Hanley in reply to Boonton
                Ignored
                says:

                when you consider it you might as well call the mortgage interest deduction a ‘mandate to buy a home on credit’.

                Well, if you want to wholly pervert language by eliding the difference between a command and a strong incentive, sure. Personally, I’d prefer that I still have a choice, even if I find the incentive too good to pass up.Report

    • Avatar Boonton in reply to Herb
      Ignored
      says:

      Amazing in that the idea that passed actually belonged to the “tyranny/socialism” screamers….the insurance mandate idea is right out of the playbook of Mitt Romney, Cato, Heritage etc. All during that time such noted defenders of liberty never noticed it was tyrannical. Now, all in the sudden, it is tyranny.

      It seems like the only non-tyrannical concept of health care reform from the Republican side is George Bush’s Medicare Part D. Basically a single payer, unfunded entitlement program.Report

  19. Avatar Boonton
    Ignored
    says:

    Jason,

    It seems like you’re failing to heed the title of your post. There is a difference between laws that make economic ‘commands’ and laws that are commands. A $3 tax on smoking is not a ‘command prohibiting smoking’ but it may be an ‘economic command’ to some people to stop smoking since it will make it economically unviable for them to continue to do so (or more likely they are unwilling to give up that $3 spending on other things in order to keep smoking). Likewise a tax on not buying health insurance is only an ‘economic command’ in the sense that it makes not buying health insurance less attractive financially to an individual.

    “Polticial” or legal demands are a different creature in that the gov’t is making an actual demand. To use my previous example, “No Parking Here” means you cannot park there. If you do you are breaking the law. Now granted the town that enacted that law may not have bothered to set a penalty for breaking it, the police may not enforce the law, you may know for a fact that the parking officer goes home at 3 PM so if you park there then you’ll never get a ticket…..all that means there’s no ‘economic command’ not to park in the sense that parking there has no economic cost to you. But nonetheless it is a ‘political command’.

    While the health bill is called a ‘mandate’ in everyday language it’s simply not in the form of a political mandate. Compare it to the NJ law that I must carry insurance on my car. If I let my insurance lapse, I’ll have about 30 days before I get a letter from NJ telling me I have to a) prove I brought other insurance or b) turn in the plates of my car so I can’t drive it. If I fail to act my license will be suspended and then I might even be fined which could end up producing a warrent on me if I ignore that. This is both a political and economic mandate. Economic in that letting it lapse will end up costing me more than it would save on insurance payments. But political in that I’m not really free to let it lapse as long as I’m willing to ‘pay the fines/fees’. It’s technically illegal for me to own a car registered to drive on the streets without keeping up insurance.Report

  20. Avatar Boonton
    Ignored
    says:

    I won’t say my thoughts on the matter are worthier than Hayek but here’s how I’m approaching this:

    I understand that one can craft laws that are on their face ‘taxes’ but are in reality something different. For example, say you had a ‘tax’ on murder in colonial times where the rate for each murder was 100 tons of pure gold. Since they had debtors prisons at that time, no murder would ever be able to pay the tax and it would functionally the same as life in prison for murder. The courts would almost certainly have struck down such a law ruling it to be a criminal penalty which required full due process of law to convict and sentence….not just a ‘tax collector’ declaring a person was in arrears.

    From that perspective the health mandate looks a lot like a tax. It’s not very high. The law goes to great lengths to insist that the gov’t cannot use law enforcement functions to enforce it. It even prohibits the gov’t from using its more severe but legitimate tax collecting functions from enforcing it. When the law was first introduced many critics from the right were less aghast at the liberty infringing aspect of the ‘mandate’ than they were worried that the mandate was far too weak to work leaving insurance companies vulnerable to being swamped by people waiting till they got sick to buy insurance.

    Now in terms of laws there are things that are allowed but with a fee or tax and things that are not allowed. For example, you are allowed to make income but you have an income tax. On the other side you are not allowed to park in a no parking zone even though the parking ticket might be pretty small compared to, say, the income tax.

    Imagine someone is nominated to the Supreme Court. Obama’s right wing critics start scouring the candidate and discover he has thousands of parking tickets. For the last twenty years he’s been parking illegally racking up multiple tickets every week. He always pays the tickets, though. But the number of citations he has been issued is just thru the roof. I can easily see the counter attack on this guy. How can he be a high judge when he seems to disrepect the law so much? His defenders might say he pays all the tickets, in fact he gives his local town gov’t more money in ticket revenue than he pays in property tax. Over the years his ticket revenue has purchased a quarter of the cop cars in the force! I think, though, his critics will maintain his chronic illegal parking is showing disrespect for the law.

    Imagine someone else whose nominated who has simply made a lot of money and paid his income tax per the law. On this count there’s not much you can say. The law allows you to make money, he did and he paid his taxes per the law.

    So now finally let’s imagine a person who may opt not to buy insurance. Say that young guy who started Facebook. I can see his financial advisor telling him he has billions of dollars, if he gets some horrible illness he can easily spare $2M for medical bills but he is young and healthy and unlikely to get sick so buying insurance isn’t a great deal. Instead he pays whatever the penalty or fee is which is less than a typical policy would cost him. Now let’s say he gets nominated to the SC or some high position.

    Do you see him being viewed like the judge who insists on illegally parking his car or like the judge who simply had a healthy income and paid his tax? If its the former then the mandate really is more like a mandate. Maybe the ‘fine’ or ‘penalty’ is modest but the law is written in that you’re really not supposed to violate the mandate doing so makes you a lawbreaker even if you pay the penalty the law prescribes.Report

  21. Avatar Jason Kuznicki
    Ignored
    says:

    The comments aren’t working right for me. I can’t make threaded replies to other posters; they all find their way to the end, unthreaded. As a result, I’m losing track of the discussion.

    I may want to make a new post about health care after I’m done reading the Cato brief issued yesterday, but I haven’t had a chance to read further yet. This comment is just to let you know I’m bowing out for now. Please don’t take it that anything you have said is unworthy of a reply.Report

  22. Avatar Michael Drew
    Ignored
    says:

    Second, there are plenty of restrictions on the government written into the Constitution, but none of them are written from the understanding that the government otherwise has the plenary power to command us directly. The Constitution doesn’t contain restrictions on the power to command citizens — because that’s not a power Congress was supposed to have at all.

    It does contain such restrictions if your argument is that powers are enumerated. If we believe that Congress has the power to regulate the economy, but only as pursuant to the terms of the Commerce Clause and the Necessary and Proper Clause, etc., then anything that isn’t pursuant to those clauses enumerating the Congress’ economic regulatory powers is not Constitutional. That would apply as much to the regulation of inactivity as much as to the regulation of activity. Any regulations of inactivity would have to satisfy a requirement to be pursuant to some clause specifically empowering the regulation as much as any regulation of activity would. I don’t see where your argument that regulation of inactivity under this theory – enumerated powers- would be less limited than regulation of activity is. I am certainly ready to be persuaded that the Constitution otherwise forbids, implicitly or explicitly, regulation of inactivity (commands as you call them), whether generally or in specific cases, but you’d need to make a case from the text or historical record that it is so, not merely assert that the limits that define clauses that imbue Congress with certain (again, delimited) powers to regulate the economy wouldn’t limit those powers in essentially the same way if such regulations are applied to inactivity as if they are applied to activity. Why wouldn’t they?Report

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