When appraising the economic debate regarding government intervention in healthcare, it is vital to consider three areas of impact: individuals, firms and the wider UK economy as a whole. These areas will be affected directly through potential new access to health care provision and related price changes, and also indirectly through impacts on wider incentive mechanisms and market structures.
Highlighting the main arguments, the anti-intervention position rests upon the supposed merits of the free-market’s ability to direct resources to those that value the services – via price signals. Additionally, the anti-intervention argument suggests that any government intercession in the sector will likely “crowd-out” more cost efficient private firms from the health care market, whilst spending public funds that could be more effectively used elsewhere.
The pro-intervention position highlights that because of the unique nature of health care, an efficient allocation of is far from certain. Therefore the government should intervene to guide the market to a correct level of demand and supply of health care services. Elsewise, in a free market, many individuals may not use health care even though it would be in their best interest due to imperfect knowledge of the long-term value of health care. Nor importantly, individuals may not potentially have access to vital services purely because of high health care costs. Moreover, as the government would not be solely reliant on market signals to guide its actions, its intervention can consider a wider range of factors than price when debating provision – e.g. the positive impact on the overall economy of having a uniformly healthy workforce on national productivity.
Towards the end of 2016, India shocked their population by announcing the sudden withdrawal a majority of currency in circulation. On the 14th November, India announced they were scrapping their 500 and 1000 rupee notes – a move affecting +85% of all rupees in circulation.
This blog post will explain that the root for the move and will analyse whether the long run benefits of the moves will achieve their publicly proclaimed benefits.
A government surplus represents the removal of funds from the private economy with uncompensated public sector productive value creation. It is a policy recommended by those that champion “austerity economics” – however logically, this pattern is liable for encouraging systemic weaknesses and therefore future economic crisis.
It should be noted that although this blog post critiques austerity government policies, it does not argue for uncontrolled government spending. Rather, the ultimate implication is that “a” level of government deficit is not a bad thing because it helps enables economic growth (or at least does not actively damage the ability to achieve for economic growth). But if this is not politically feasible, at least target balanced government books – because at least this is not actively harming the ability for economic growth and encouraging economic crisis.
In India there is a government scheme to encourage the circulation of gold trapped in private hands to help encourage domestic economic growth. It creates a domestic source of capital that did not previously exist and reduces the reliance on temperamental foreign direct investment.
The theory is that the increased circulation of value will encourage capitalist forces to prompt and deepen private investment throughout the economy – instead of the country’s vast private golden wealth sitting idle in inactive private hands.