No Runny Eggs

The repository of one hard-boiled egg from the south suburbs of Milwaukee, Wisconsin (and the occassional guest-blogger). The ramblings within may or may not offend, shock and awe you, but they are what I (or my guest-bloggers) think.

Yoohoo, Socialized Medicine Fans….

by @ 5:21 on September 10, 2008. Filed under Transportation.

High oil prices suck!   Airline fare prices are up, gas prices are up, prices for any good that uses petroleum to make it, or transport it, are up!

High oil prices suck!   But there is a silver lining.

USAToday reports with this headline:

Survey: Public transit pressures could hurt riders

Huh? What? How can that be? Haven’t the mass transit folks been crying, pleading and cajoling people to “Keep the Earth Green!” and ride mass transit? Yet, now that more people are riding mass transit, they’re having problems?

I’m sure you’re thinking, “This is temporary. They’ve gotten so much additional business so fast, they have a short term problem until they add more buses or choo choos or some other form of communal sweat sharing transportation vehicle to the inventory.” You might think that, but you’d be wrong!

According to the President of the American Public Transportation Association (APTA), which represents transit agencies:

“We’re going to see more (fare) increases and more service cuts at a time when the nation is trying to encourage people to use public transit.”

It’s easy to understand the rate increases. Heck, they’re selling as much as they have. Any capitalistic marketer would increase their prices in a similar situation. But, decrease their service? How can they do that? Wouldn’t they want to add as much as they can while the demand is there? Yes they would, if they were making a profit!

The problem with public transportation is that they sell their service at a loss. Depending upon the system and the city, public transportation takes in between $.20 to $.50 for every dollar they spend. They epitomize the old marketing joke about selling at a loss and making it up in volume!

The transit systems all have budgets (of some kind) and because states and municipalities can’t print their own money, the transit systems must manage their systems within those budgets(at least until they come back and strong arm another tax increase from the morons taxpayers). The result is that when they have more ridership than their budget will handle, they cut services (routes) to try to manage to their budget.

What’s this got to do with socialized medicine? It works the same way.

If the US implements socialized medicine, there will be a budget for it. When services are provided for free or below their market rates (as we see in mass transit), the demand for the product inordinately increases because there are no natural price restrictions. Unfortunately, there will be restrictions on how much can be spent on the system, even if the Govt. is printing money. If you have no restrictions built in on the pricing side and you have a budget to stay within, there will have to be restrictions on the cost side. The result will be just like what is occurring to mass transit; services will be cut or rationed.

If you like the idea of the Govt. managing healthcare, stop and talk to someone who is dependent on mass transportation. Ask them what they think of the fare increases and the route cuts.

High oil prices do have  a silver lining; they teach us why socialized medicine won’t work.

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