Obama’s claim that a government option will somehow keep the private health insurance carriers honest is either disingenuous or incredibly ignorant of basic economics.

Can the government honestly be expected to both regulate and compete with private insurance carriers? When a private carrier cannot recoup or control its costs,  it loses money and goes out of business; a government insurance provider can be subsidized by the tax payer indefinitely.  Think Post Office and Amtrak.

But why does Obama think that a market with thousands of insurance companies competing needs to be kept honest by anyone?  Do we also need the federal government to enter  the auto or life insurance markets to keep them honest or is only health insurance in need of such government supervision?

Do the greedy oil companies need a state owned oil company to keep them honest? Should we have government owned grocers and farms to keep food costs down?

Some argue that the government would not have to earn a profit. But it is the desire to make a profit that attracts competition into a market and drives costs down. It is the desire for profit that drives efficiency to reduce costs. Medicare is fraught with fraud costing over $70 billion a year.  In New York State alone it is estimated to be 10% of their cost.  They have no profit incentive to control that cost.

If we depend on the government to keep private providers honest, who do we depend on to keep government providers honest?