I usually find Krugman pretty sober, but this technical claim seems
economically dubious: "When people choose not to buy broccoli, they
don't make broccoli unavailable to those who want it. But when people
don't buy health insurance until they get sick --- which is what
happens in the absence of a mandate --- the resulting worsening of the
risk pool makes insurance more expensive, and often unaffordable, for
those who remain."
While true that when people choose not to buy broccoli it might not
make broccoli "unavailable", it might affect "broccoli liquidity",
thereby prompting suppliers to switch to more lucrative veggies.
Could those here with knowlege of substitution economics see if my
following point makes sense, as I think it does:
While true that when people choose not to buy broccoli it might not
make broccoli "unavailable", it might affect "broccoli liquidity",
thereby prompting suppliers to switch to more lucrative veggies.
So, suppose broccoli demand fell by 95%, and those formerly buying
broccoli developed a craving for spinach. Would that not basically
guarantee that the market for broccoli would all but collapse?
I realize there are sound moral arguments for (universal) health
insurance that Krugman does not raise here, but does my criticism of
his point above make sense, in a technical economic sense?
--
Bill Lear
r * e * @ * o * y * a * c * m
* a * l * z * p * r * . * o *
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