June 29th, 2009

Reports the Philadelphia Inquirer:

Substitute health insurance for police and fire protection, and you have one of the best – and least-heralded – arguments for universal health care, according to a small but growing number of economists.

It is an argument with potential appeal across traditional partisan boundaries: that severing the link between reliable health insurance and employment could unleash a wave of pent-up entrepreneurial energy, much as conservatives often argue that cutting marginal tax rates stimulates the economy.

One who makes the case is Jonathan Gruber, an economist at the Massachusetts Institute of Technology. Gruber says the evidence that universal coverage would spur economic growth is limited, but “the logic is absolutely convincing – the logic is impeccable.”

“The example I think of is the 50-year-old engineer at IBM whose wife is a cancer survivor and who wants to start his own company,” Gruber said. “He’s just not going to do it in today’s world, because he just can’t take that chance on health insurance. In a world of health reform, he can do that.”

The basic argument is that two developments since the mid-20th century, together, are slowing down U.S. economic growth much as a sea anchor slows down a ship.

Read more at the Philadelphia Inquirer.