Fox News Tells It Like It Is

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Originally Posted by PaulS

There are a lot of other things we can do to lower costs (including some sort of tort reform) but they won't be put into law for a # of reasons. in my opinion we're never going to lower costs as long as hospitals/drug companies can charge whatever they want. But you can't stop that in a free market society.

Paul, I have to disagree with your last sentence. First of all, we are well into transforming our society from a free market to a government regulated one.

Secondly, in a free market, prices are not established by whatever the seller wants. Prices, in a free market, reach equilibrium when both seller and buyer agree. Government intervention in the business process and by price regulations, when excessive, destroy free markets, transforming them into command economies. Then price equilibriums are not possible, and the demand supply function is distorted to fit rigid patterns outlined by government fiat. Supply dwindles and prices rise. The price "signals" that business uses to determine output and feasibility are replaced by a host of regulatory demands that hide the "free market" portion of transactions which are buried under the cost of fulfilling the regulations.

In a free market, it is actually easier to lower prices if that is what reaches the equilibrium between seller and buyer. In a command economy that free exchange is eliminated and replaced by third party directives. In the case of socialistic governments the goal, supposedly, is to equalize outcomes for everybody. The one size fits all model. Prices, supply and demand, choice . . . and freedom . . . are irrelevant.