Massachusetts benefits from another type of subsidy that props up its regime of mandates and price controls: large subsidies from the federal government. In contrast, the United States as a whole has no external party it can exploit to subsidize a nationwide Massachusetts-style health care overhaul"unless Congress finances that overhaul through additional deficit spending, which is really just another way of taxing the young to subsidize the old.

by Aaron Yelowitz

Aaron Yelowitz is an associate professor of economics at the University of Kentucky and an adjunct scholar at the Cato Institute. This paper is based on a lecture delivered to the Undergraduate Economics Society at the University of Kentucky on October 1, 2009.