Paul Krugman vs. Ron Paul and Friedrich Hayek

Paul Krugman tried to slam Ron Paul in his most recent column by writing:

Back in 1980, just as America was making its political turn to the right, Milton Friedman lent his voice to the change with the famous TV series “Free to Choose.” In episode after episode, the genial economist identified laissez-faire economics with personal choice and empowerment, an upbeat vision that would be echoed and amplified by Ronald Reagan.

But that was then. Today, “free to choose” has become “free to die.”

I’m referring, as you might guess, to what happened during Monday’s G.O.P. presidential debate. CNN’s Wolf Blitzer asked Representative Ron Paul what we should do if a 30-year-old man who chose not to purchase health insurance suddenly found himself in need of six months of intensive care. Mr. Paul replied, “That’s what freedom is all about — taking your own risks.” Mr. Blitzer pressed him again, asking whether “society should just let him die.”

And the crowd erupted with cheers and shouts of “Yeah!”

Ah, but what was Ron Paul’s response? Here is the full transcript:

Wolf Blitzer: You’re a physician, Ron Paul, so you’re a doctor, you know something about this subject. Let me ask you this hypothetical question: A healthy, 30-year old young man has a good job, makes a good living, but decides, “You know what? I’m not going to spend 200 or 300 dollars a month for health insurance, because I’m healthy, I don’t need it.” But something terrible happens. All of a sudden, he needs it. Who’s going to pay for it if he goes into a coma? Who pays for that?

Ron Paul: In a society that you accept welfare-ism and socialism, he expects the government to take care of him…

WB: What do you want?

RP: …but what he should do is whatever he wants to do and assume responsibility for himself. My advice to him would be to have a major medical policy, but not be forced…

Here, Ron Paul was clearly going to say the person should not be forced to buy insurance by the government (crucial context), but CNN’s Wolf Blitzer rudely interrupted him:

WB: But he doesn’t have that. He doesn’t have it, and he needs intensive care for six months. Who pays?

RP: That’s what freedom is all about, taking your own risks. [Applause] This whole idea that you have to prepare and take care of everybody… [Applause]

WB: But, Congressman, are you saying the society should just let him die?

RP: No! [A few audience members shout “Yeah”. Laughter.] I practiced medicine before we had Medicaid in the early 1960s, when I got out of medical school. I practiced at Santa Rosa Hospital at San Antonio, and the churches took care of them. We never turned anybody away from the hospitals! And we’ve given up on this whole concept that we might take care of ourselves, assume responsibility for ourselves. Our neighbors, our friends, our churches would do it. This whole idea—that’s the reason the cost is so high! The cost is so high because we dump it on the government, it becomes a bureaucracy, it becomes special interests, it kowtows to the insurance companies and the drug companies, and then on top of that, you have the inflation. The inflation devalues the dollar. We have lack of competition. There’s no competition in medicine! Everybody’s protected by licensing. We should actually legalize alternative health care, allow people to practice what they want! [Applause]

So Ron Paul actually responded with a firm “No!”, but Krugman relies upon a couple of shouts from the audience in an apparent attempt to impugn Paul by making him seem heartless. Krugman was no less dishonest as he continued, saying that:

[A]fter the crowd weighed in, Mr. Paul basically tried to evade the question, asserting that warm-hearted doctors and charitable individuals would always make sure that people received the care they needed—or at least they would if they hadn’t been corrupted by the welfare state.

But Ron Paul didn’t “evade” the question at all. He answered it with a firm and direct, “No!” And he didn’t offer some hypothetical of what would be true if there was no welfare state, in terms of health insurance, he stated the fact of what was true before the welfare state came to be, which makes Krugman’s next comments all the more dishonest:

Sorry, but that’s a fantasy. People who can’t afford essential medical care often fail to get it, and always have — and sometimes they die as a result.

So, again Krugman would have his readers believe Ron Paul was offering a hypothetical about what would be true if the situation was different, when in truth he was stating the fact about what was true when the situation was different. Sorry, but that’s not a fantasy. That’s history. Notice how Krugman deliberately says this isn’t true today, which — his intentions to mislead his readers as to Ron Paul’s actual response notwithstanding — actually reinforces Ron Paul’s point that before the government got involved, hospitals never turned away patients and that private individuals or communities took care of the costs.

Krugman next attempts to portray Ron Paul, who holds to the Austrian school of economics, as opposed to Krugman’s Keynesian view — as some kind of radical by turning to Austrian economist Friedrich Hayek for support for his position in favor of the welfare state. Krugman writes:

In the past, conservatives accepted the need for a government-provided safety net on humanitarian grounds. Don’t take it from me, take it from Friedrich Hayek, the conservative intellectual hero, who specifically declared in “The Road to Serfdom” his support for “a comprehensive system of social insurance” to protect citizens against “the common hazards of life,” and singled out health in particular.

Okay, let’s go and look at what Hayek actually wrote, at length, and in context (emphasis added throughout):

Like the spurious “economic freedom”, and with more justice, economic security is often represented as an indispensable condition of real liberty. In a sense this is both true and important. Independence of mind or strength of character are rarely found among those who cannot be confident that they will make their way by their own effort.

Hmm… Could this have anything to do with what Ron Paul said about people assuming their own risks and accepting responsibility for themselves? Let’s continue:

Yet the idea of economic security is no less vague and ambiguous than most other terms in this field; and because of this the general approval given to the demand for security may become a danger to liberty. Indeed, when security is understood in too absolute a sense, the general striving for it, far from increasing the chances of freedom, becomes the gravest threat to it.

Hmm… Do you think this sounds more like Ron Paul or Paul Krugman at this point? Continuing:

It will be well to contrast at the outset the two kinds of security: the limited one, which can be achieved for all, and which is therefore no privilege but a legitimate object of desire; and the absolute security which in a free society cannot be achieved for all and which ought not to be given as a privilege—except in a few special instances such as that of the judges, where complete independence is of paramount importance. These two kinds of security are, first, security against severe physical privation [lack of the basic necessities of life], the certainty of a given minimum of sustenance for all; and, secondly, the security of a given standard of life, or of the relative position which one person or group enjoys compared with others; or, as we may put it briefly, the security of a minimum income and the security of the particular income a person is thought to deserve.

Follow? So there is the “security” of having the basic necessities of life that one needs, such as food, shelter, and clothing, and then there is the “security” of having the standard of living that one desires. What is Hayek’s view on each of these two kinds of security? Continuing:

We shall presently see that this distinction largely coincides with the distinction between the security which can be provided for all outside of and supplementary to the market system, and the security which can be provided only for some and only by controlling or abolishing the market.

Pause again and consider that in light of the two kinds of “security” Hayek offered a distinction between; those needs which can be provided for in accordance with a free market system and in accordance with liberty, and those wants which can be provided for only by eliminating the free market and infringing upon liberty. Continuing:

There is no reason why in a society that has reached the general level of wealth which ours has attained, the first kind of security should not be guaranteed to all without endangering general freedom. There are difficult questions about the precise standard which should thus be assured: there is particularly the important question whether those who thus rely on the community should indefinitely enjoy all the same liberties as the rest. An incautious handling of these questions might well cause serious and perhaps even dangerous political problems; but there can be no doubt that some minimum of food, shelter, and clothing, sufficient to preserve health and the capacity to work, can be assured to everybody. Indeed, for a considerable part of the population of this country this sort of security has long been achieved.

Notice that Hayek acknowledges that the basic necessities of life had not been achieved for all at the time he was writing, even though he believed there was no reason it could not be achieved under a free market system, and that he thought the issue raised important questions about the risk of people who would rely upon social welfare feeling a sense of entitlement, which could lead to “dangerous political problems” resulting in loss of individual liberty and/or the destruction of the free market. Continuing:

Nor is there any reason why the state should not assist the individuals in providing for those common hazards of life against which, because of their uncertainty, few individuals can make adequate provision. Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance, where, in short, we deal with genuinely insurable risks, the case for the state helping to organize a comprehensive system of social insurance is very strong.

So there are the portions Krugman quoted in context. Thus, one may observe that what Hayek was saying is that there is no reason the state should not be able to assist individuals who became sick or had an accident within a free-market economy and without infringing upon individual liberty. Continuing:

There are many points of detail where those wishing to preserve the competitive system and those wishing to supersede it by something different will disagree on the details of such schemes; and it is possible under the name of social insurance to introduce measures which tend to make competition more or less ineffective.

Hmm… What was that Ron Paul said about “We have lack of competition. There’s no competition in medicine!”? Continuing:

But there is no incompatibility in principle between the state providing greater security in this way and the preservation of individual freedom. To the same category belongs also the increase of security through the state rendering assistance to the victims of such “acts of God” as earthquakes and floods. Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself, nor make provision for the consequences, such communal action should undoubtedly be taken.

Okay, so now let’s go back once more to Ron Paul’s actual answer to the question once again and compare it and compare it with Krugman and with what Hayek actually said. Ron Paul said, No, society should not let the uninsured person die. Before government took over the health care industry, hospitals never turned anybody away. For the uninsured, the community took care of them. Americans have lost the idea that we should be responsible for ourselves, and this is why health care costs are so high, because we’ve come to expect the government to take care of use and it’s become a bureaucracy that favors special interests and kowtows to the insurance and drug companies that profit when the risk is socialized, which destroys the free market and competition in medicine, which raises health care costs.

Ron Paul was in large part speaking out against the federal mandate that requires Americans under threat of penalty to purchase services from private companies. For Krugman to invoke Hayek, who unquestionably would have included a federally mandate to purchase insurance as a violation of the free markets and of liberty, in an attempt to challenge Paul’s position on health care is the height of intellectual dishonesty.

Forget what you think you know about the Israel-Palestine conflict

Jeremy R. Hammond

Jeremy R. Hammond is an award-winning political analyst, editor and publisher of Foreign Policy Journal, and author. His new book is Obstacle to Peace: The US Role in the Israeli-Palestinian Conflict. Read the first chapter FREE at! 

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  • krissy

    Thank You for this wonderful Article!



  • fyi2day

    The desperation of leftists like Krugman is telling. Exaggerating facts easily confirmed (like the crowd reaction at the GOP debate for instance) as their arguments disintegrate and a clear failure to address the evidence of their long held theories failing practice, does not reveal the mind of a scientist but one of a social engineer.
    Keynes is dead.

    The very existence of Ron Paul is throwing light on the dark corners of American political hypocrisy. Strangely people are actually looking.

  • Douglas MacIlroy

    At last, an intelligent, reasoned article detailing the distortions of media hacks (the name Blitzer never more appropriate than now), and exposing the truth.

    Ron Paul is the real deal. None of the other cookie cutter politicians in that “debate” could hold a candle to him.

    Wake up people. You can’t stop what’s coming.

    Vote Ron Paul in 2012 or paty the price with four more years of socialism and a rapid death spiral of the dollar and our nation.

    • You should look up what socialism is – cause you sure don’t know.

  • Shawn Lorenzo York

    No army (or media) can stop an idea who’s time has come…

    Dr. Ron Paul has already won.

  • Mason

    What a great article, you give the whole story not just a paraphrased quote from the debate. I love the background information as well as providing transcripts. It truly shows the sad attempt by Krugman to discredit Ron Paul.

  • Liberty2012

    Excellent article!!!
    Ron Paul 2012

  • Great article, Ron Paul 2012!

  • TSimons

    Fantastic article!!! A “Must Share”.

  • Marvin Cooley

    Paul Krugman and other pundits who like to berate and demonize Ron Paul prove without a doubt his changes of winning it all. They are frighten and can’t sleep at night thinking about him as president. He would put them all out of business. He is going to be the next president and the troops are coming home. It is just a matter of time.
    Great article. Thanks I learned a lot.

  • hamblundog

    Its amazing, the difference between what most articles are claiming Paul said and the actual transcript. Thanks for the very well constructed read.

  • Dr. Kibble

    This is true journalism!

  • Brad Linzy

    Is it to soon to formally declare…

    We are all Austrians now!

  • Thanks for all the comments!

  • Joseph

    I would love to share this, but most of the people I know wouldn’t read it and wouldn’t understand it even if they did. I enjoyed reading this and applaud you for writing it.

  • Tony

    Great article.
    Ron Paul is the only candidate that can fix America from this path of destruction. All these other phoneys want to keep the Fed and keep the wars going. As soon as people realize that America can’t even afford the interest on its debt things will turn south for decades. Once the USD is no longer the world’s reserve currency America will experience hyper inflation to levels they have never seen before.
    **Ron Paul 2012**

  • anonoped

    Looks like Krugman has been caught in his own web of lies.

    Makes me wonder if Krugman would rather torpedo the economy defending his in-defensible position over stepping aside and letting something else that could work actually work.

    Anyway, great article.

  • Ryan

    Thank you for such a great article! The honesty and fact checking was simply amazing. Very few are nearly as honest and thorough as you!

  • FL John

    “Yet the criterion of truth is that it works, even if no one is prepared to acknowledge it.”
    Ludwig von Mises

    People are waking up the the fraud that has been perpetrated by our elected officials. Maybe Ron Paul can help roll back the federal government before it collapses under its own weight.

  • Rat9

    Thanks for debunking krugman. He keeps writing things that need review like this, and it bugs me.

  • Well said and well argued, Mr. Hammond. Kudos!

  • Man, what do you have to do to win the Nobel in economics? Do a third grade math test without a calculator? If Paul Krugman has one, can’t be much harder than that.

    I want in on that action, too! Where do I sign up for the free Swedish money?

    • reilly

      You are so glib, and so wrong. Why do people like you, who so clearly have not investigated an issue beyond the article at hand, feel so ready to comment? You’re not funny and you cheapen the discourse. If you don’t have something truly productive to share, do your sniggering on your own.

      • Robbie

        I thought it was funny. Maybe you’re too educated to get it? I guess that can be expected from a grown man in the 21st century using the word “sniggering”.

        • John

          Leave him alone… it’s not easy trying to sound smart.

      • reilly_is a pig

        reilly, why don’t you shove it? this is the internets.

        • zee788

          enough children.

    • Economist Batman

      Well, his Nobel prize winning work was really pretty clever and allowed for some good jumping-off points.

      The core implications of the model were probably wrong though.

  • Burly

    Thank you for the articulate and thoughtful response to Krugman. Krugman must have difficulty in understanding the contradictions in his mind when he is honest with himself. Ron Paul has been steady in his defense of liberty and the tide is turning back to freedom. In times of crises, a leader like Ron Paul is vital because he does not have to discover his principles, he has already thought them through. Thank you sir for defending truth, logic and honesty. And thank you Ron Paul, you fought when not many where by your side. Ron Paul 2012.


      You have to pardon Krugman, he has Electile Disfunction and his insurance does not cover that :)

  • Robert Fallin

    Great article. Krugman must have obtained his Nobel prize from the same batch of Cracker Jacks as Barack Obama. I know more about the creation of wealth than Paul Krugman.

    • patrick

      exactly, if Obama can get a nobel PEACE prize, what does that say about the standards of any of the nobel prizes.

  • Eric Smith

    I actually do not have as big of problem with Krugman’s nobel prize as I do with the fact that none of the other economists he worked with got much for recognition.

    I do think that since winning it, Krugman has become a sale out. Blurting out whatever extreme left garbage he think the new york times will eat up that week. I don’t even think he believes most his own drivel anymore. It’s sad but he’s getting paid so why stop?

  • Robert H

    “Before government took over the health care industry, hospitals never turned anybody away.”

    Bull! There have always been a few charity hospitals (hospices would be a better word), but hospitals indeed did turn the sick away, and would also discharge the sick once they ran out of money. The only reason they stopped is that the federal government prohibited it.

    • John Hansen

      Spot on…not only did they deny care based on the patients lack of money but they routinely denied care for those who were not of the “appropriate” race to be served by the hospitals. This was true even to the point that several people actually died outside the doors to the ER after having been turned away. What I don’t get and what I think Blitzer was going after with his question was what happens when someone doesn’t have insurance or any social connections to a community, be it a city or church or social group? Hoover famously quipped that the role of the state in helping those suffering from the Great Depression was minimal with the churches being more apt to respond to their needs. This doesn’t mean Hoover did not care about the poor but he like Ron Paul and most modern libertarians simply are not being realistic with what will really happen to those down and out and in need of some fundamental help, such as food or healthcare. While some may indeed find help down at the local church or from their neighbors many will not. What happens to them? One cannot simply write off their final scenes. The only entity large enough to tackle such issues is the Government and it can do it better and with a more sound set of ethics than any private sector business or religious non-profit.

      • C4LCNCPLS

        The government is already picking up the cost for those that do not have insurance. Hospitals forward the bills to the state and they are paid out of Medicaid funds. That is why states are going broke. It wouldn’t be so bad if, they didn’t have so many illegals coming here.

        Until there is competition in healthcare, nothing will change. Not even under Obamacare.

        What people need to realize is that Big Pharma and Healthcare providers are the ones writing the healthcare bills. As long as that continues, the people will continue to go bankrupt with medical bills.

        Our politicians are bought and paid for. Keep special interest out of our House and maybe things can change.

      • MikeyC

        The gov has been doing it. The healthcare industry is the most regulated industry there is. Take it from me. I was in the industry. You use to be able to purchase a family insurance plan for $35 bucks now it is closer to $1600. Thanks to Gov intervention. I dont have insurance now and my church helps me if there is issues. His whole point is that people have stopped taking responsibility for themselves. Why should i pay for someone that refused to take care of themselves. I use medicare as the example. Fraud is rampant. Price is skyrocketing, and it is unsustanable. Get a clue.

    • Amin

      People got the care they needed in the 50s because costs were a lot lower.

      By forcing all hospitals to accept any patient, price consideration was taken out of the picture, and health care was put into the hands of third parties: insurance companies and governments.

      • Atticus Dogsbody

        If it was government involvement that sent medical cost through the roof, then medical costs in the UK, France, Australia, NZ, Scandinavia, etc., should also have gone through the roof, but they haven’t. That leaves the insurance companies. UK, France, Australia, NZ & Scandinavia also have for profit insurance companies, but, unlike the U.S., they are heavily regulated i.e. the neoliberal idiocy that runs rampant in th U.S. has been held in check. Unsurprisingly, the insurance companies in those places still make profits.

        • Amin

          Medical costs in the UK, France, Australia, Canada and all other Western nations are going through the roof. It’s the number one budget challenge of all advanced nations.

          • patrick

            There is also rationing and/or long waiting periods for surgery and other stuff in the UK. Pretending that every problem can be solved by throwing funny money at it is ridiculous.

  • The reality is that all colectivist systems are poorly equipped and ever more expensive, due to the reasons Paul gave. Many people without the proper Connections die on waiting lists or die because of poor or sub standard treatment. In colectivist societies people have less money than in free societies and poorer people live less than their richer peers. The real question is: do we want to live in a corrupt colectivist system in order to theoretically save poor people from dying without healthcare or do we want a free society where people can take care of themselves and help the needy either with support vouchers or charity. No reward is high enough to want to live in a fascist or socialist society. More people will die earlier on than in free societies,

  • Evan Rogers

    Finally someone got the position right.

    The MSM can’t even listen to the words of the man that they want to skewer.

    Too bad it’s already old news. On the bright side, I learned that about 5 major media outlets are completely unreliable from the incident. FPJ seems somewhat credible!

  • Rephaite

    Ron Paul’s reference was anecdotal, not statistical, and in that light, Paul was NOT talking about what was historically “true”. Back in Paul’s past, he saw SOME people helped by charity. There were still plenty of people who did not receive needed care, and died as a result. Charity did not intervene in all cases – Paul was simply idealizing past events.

    It seems pretty obvious, also, from the debate, that Paul’s statement was intended to make forward-looking implications about how the nation ought to proceed. We are, after all, not considering Paul for a presidency back in the 1960s. The role of the President is not to idly speculate about what could have been, but rather to act in the present to achieve real policy goals. In this light, I do not think that it was at all deceptive for Krugman to criticize Paul’s statements by examining the modern context. Paul meandered verbally about an ideal world without giving even the slightest hint of how we might get from here to there. If Paul would not push Congress to instantly eliminate government healthcare, as Krugman hypothesized, what would he do instead?

    • Amin

      “Paul meandered verbally about an ideal world without giving even the slightest hint of how we might get from here to there. ”

      He explained how we might get there:

      The cost is so high because we dump it on the government, it becomes a bureaucracy, it becomes special interests, it kowtows to the insurance companies and the drug companies, and then on top of that, you have the inflation. The inflation devalues the dollar. We have lack of competition. There’s no competition in medicine! Everybody’s protected by licensing. We should actually legalize alternative health care, allow people to practice
      what they want!

      Free markets, competition, etc.

    • Ron Paul’s reference was anecdotal, not statistical, and in that light, Paul was NOT talking about what was historically “true”.

      Ron Paul expressed his own experience of what was true where he worked at the time. Neither Ron Paul nor I suggested there weren’t still plenty of people who did not receive care.

      I do not think that it was at all deceptive for Krugman to criticize Paul’s statements by examining the modern context.

      It was absolutely dishonest of Krugman to say that Ron Paul tried to “evade” the question when he responded with a firm “No”, and for him to deceive his readers that Ron Paul’s remark was about today’s “modern context” when he was in fact making a statement about his experience as a physician in the 1960s.

      • You wrote:

        “Neither Ron Paul nor I suggested there weren’t still plenty of people who did not receive care.”

        Ron Paul said:

        “We never turned anybody away from the hospitals!”

        • StudiodeKadent

          Please note the word “we” in what Ron Paul said. In context, “we” was referring to “me and the people I worked with” rather than “society in general.”

          Paul was quite clearly speaking of his own experience. This does not imply that he believes all people’s experiences were identical to his own.

          I have my disagreements with Paul, but attempting to distort what he says is blatant intellectual dishonesty and this article is noble for identifying such intellectual dishonesty.

          I should also add that Krugman dynamites his credibility (yet again) when he calls Hayek “conservative.” Hayek criticized Conservatism and rejected the Conservative movement in an article entitled “Why I Am Not A Conservative.” Krugman obviously doesn’t care about representing Hayek fairly.

        • Yes, he did. Did Ron Paul work at every hospital in the nation? He was speaking from his own experience where he worked, in his state. Also, hospitals could never turn anyone away and it could remain true that people would still not receive care.

  • Amin

    “Paul meandered verbally about an ideal world without giving even the slightest hint of how we might get from here to there. ”

    He explained how we might get there:

    The cost is so high because we dump it on the government, it becomes a bureaucracy, it becomes special interests, it kowtows to the insurance companies and the drug companies, and then on top of that, you have the inflation. The inflation devalues the dollar. We have lack of competition. There’s no competition in medicine! Everybody’s protected by licensing. We should actually legalize alternative health care, allow people to practice what they want!

    Free markets, competition, etc.

  • mrobert

    Might I state the obvious… there are many who get medical care that they need and still die. What are we to do about that? There are errors made while in hospitals, infections acquired there, procedures done that are not required/necessary in order for medical staff to “cover themselves” … what are we to do about that?

    Every mass regulatory intervention into a system that is done out of benevolence ALWAYS creates a larger problem, added costs and zillions of unintended consequences.

    I am not making light of loss of life. I am actually a physician. But, we can only be certain that a person is being taken care of if WE as individuals are seeing to it. When we palliate our consciences with the mantra “the government is taking care of that; that is why I pay taxes” (incidentally, I am not sure what the 40% of Americans who pay no income taxes tell themselves) we are shunning our own individual responsibilities to take care of our neighbor.

    Some may say “the problem is too serious and too big to just say WE should just watch out for our neighbors”… Well, yes.. the problem is big, and bigger because we have allowed our government to grow so large and intervene into every area of our personal lives that we have nearly created a larger problem than the one we set out to solve. Read “Economics in One Lesson” by Hazlett.

    We need to stop driving our country into the ditch by thinking that we, or government, can solve every problem related to being a human being. We may be rich, blessed, whatever you want to call it, but we are not above suffering, need, pain, financial pressure, having to make financial choices, sacrificing for others… The sooner we accept this and get our house and currency in order the better – and less painful it will be for all of us, including the poor.


      As a Physician, how do we reduce the number of deaths from MSRA acquired while in the hospital? I know several people who went into hospitals for care and ended up dying from MSRA they acquired while in the hospital. This should not happen. And it seems as though the media hides the facts on MSRA.

    • I sure wish this “Oh, but nearly half of everyone pays no income taxes” talking point would just die.

      As anyone can see[1], currently payroll taxes, which all workers pay, but investors do no, is nearly equal to income taxes. The poor pay taxes.

      Further, if you count all taxes, not just Federal (for a bunch of yokels who want trumpet State’s Rights, they sure do ignore State Taxes often enough. Coincidence?), the lower middle class don’t catch a break.

      Everyone who works pays taxes. The investor class, including billionaires, sometimes pay less, as a percentage of their income, than a typical industrial worker.



  • Steven

    First, Dr. Krugman’s Nobel Memorial Prize was for work in trade economics, not political economy nor any other economics specialty that is at all related to healthcare or domestic policy. While I believe it should have been a joint award, the work was definitely groundbreaking. However, over the past decade, his NYT columns chronicle his increasing partisanship and hysteria. I find Dr. Krugman’s trajectory sad, since I once respected him as an honest opponent.

    Also, a brief aside to those criticizing Dr. Paul for lacking specifics: This occurred within a debate, with relatively short time limits for answers, and the interruptions from the moderator and the audience cut into the relatively brief time allowed. His books go into more detail, as does his campaign web site. Furthermore, Dr. Paul does not propose changing everything right away. He maintains that those that are currently dependent upon the existing system will be maintained, with their benefits paid for through reductions in troop deployments and cuts in other areas (energy and education).

    Thus, there are two real questions to investigate with respect to Dr. Paul’s answer. First, is a medical system that relies on families, churches, communities, and charities viable to achieve decent coverage limits? Second, if the first question is answered in the affirmative, then is it feasible to transition to that system from our present situation within an acceptable time frame?

    Dr. Paul’s anecdote is part of an argument that the answer to this first question is yes. If there are general statistics available from the 40s and 50s, those serve to provide a decent basis for answering this question. Other factors in answering the first are related to what efficiencies competition can bring to lower to cost of modern medical treatments that have been discovered since the 50s, and what the effects of his economic proposals would be upon the poor and elderly. At a minimum, his monetary policy would lead to higher interest rates and lower inflation, which would generally help the elderly. I believe that the system he proposes could work within a hypothetical society, and would expect that a more detailed analysis of the various data would indicate that the answer to the first question is affirmative.

    The second question is the tricky one. The data shows fairly broad political support for Medicare, and it seems that it would be extremely difficult to sell the public on such a massive shift. I’d refer here to “Myth of the Rational Voter”. Especially since Dr. Paul’s priorities are within foreign and monetary policy, I do not believe that it would be feasible within his administration to sell the public on the changes he desires. If the Republican party can rally around these kinds of reforms and make this one of its long term projects, similar to the role welfare reform once played, then it might be possible. Alternatively, if a Dr. Paul presidency were followed by an individual with a very similar ideology, these kinds of reforms enter the realm of possibility.

    Anyways, I just wish that people would discuss the actual questions, instead of engaging in baseless ad hominems and straw men. Unlike Dr. Krugman, Rick Ungar of Mother Jones engaged the actual questions and arguments of Dr. Paul. While I disagree with Ungar’s assessment, I would like to give him respect for trying to grapple with the actual issues.

  • truth

    The level of sophistry practiced by the Ron Paul supporters is astounding. For those of you who can easily see through the lies presented in just the analysis of the conversations, here are a few simple facts:

    1) The US spends more in healthcare than any other nation, and gets the worst return on amount spent in terms of outcome. That’s because we have a corporate for profit system.

    2) If Ron Paul/right wingers really want to be consistent, they would insist on doing away with government run universal military, which is what our Army, Navy, Air Force, Marines, and Coast Guard are. Why don’t we have individuals decide whether they want to invest in their own military security? Why don’t we have individuals with the right to choose what battle plan they want to implement, what military supplies they will use on the battle front, etc.? History has already done away with feudalism because it just wasn’t as efficient as what replaced it, states with governments that ran those things.

    This is like debating global warming, whether or not Iraq had WMD, etc. There will always be a few hard core delusional people who won’t face reality. Thank god the Ron Paul cult will never reach a large enough number to actually win the presidency.

    • What is delusional is thinking that health operates in the U.S. on a free market system.

      • Cambodia has a very nearly free market system. If you have the money, you get the care.

        Please consider reading this[1]. It shows that, compared to our peers in the developed world, America has a relatively free system.

        In Germany, those laughable dolts (undoubtedly crypto-neo-fascist) reward insurance company managers for covering more people. In America we know to reward the managers who deny the most claims!

        [1] –

        • You argue “America has a relatively free system”. That it may have. It still does not have a free market health care system.

    • Krugman Is A Liar

      The same comment you made about healthcare can be made about our public school system. We spend the most and get horrible results. If the problem is with “profits and greed” then why is the public school system so bad that the biggest proponents of it like Obama, Clinton, Rahm emanuel, etc send their children to private schools?

      Maybe it is because just like with the school system, government intervention completely distorts the pricing system? We don’t even have close to a free market with health care with Medicare, Medicaid, etc.

      I also say this as someone who has first hand experience with our wonderful government health care system. It is horrible. It is also far, far less compassionate than what I have experienced in the quasi private market because what incentive is there for VA hospitals to be worth a damn?

      No. Anyone who advocates the fascist health care for all clearly has not had much experience with the wonders of the VA hospital system, the Social Security Admin having the ability to declare that people are not really sick without a medical reason, etc because when the state acts it is inherently political.

      Krugman is a horrible economist, an establishment hack, and now has proven to be a liar.

      • We spend the most, sure, but do we get horrible results? Who told you we did?

        The most recent international study doesn’t show we get horrible results. You know, much more than “who” sold you this bill of goods, I wonder “why.” Why do you think somebody would lie to you about the results of the US education system?

        The only internationally recognized test worth talking about is the Program for International Student Assessment.

        The US Department of Education provided a breakdown of the results, for the most recent year, for reading only. They’ll do something different next time.

        Broken down by race, these are the results you called “horrible.”

        Average score, reading literacy, PISA, 2009:

        1. [United States, Asian students 541]
        2. Korea 539
        3. Finland 536
        4. [United States, white students 525]

        If treated as a country, American students of Asian descent ARE THE BEST IN THE WORLD.

        By the way, I know “who” is spreading these lies about the American education system, it is the “education reform” pimps. Michelle Rhee cooked the books in Maryland. The other major education reform scandal was here in NYC, where they cooked the books.

        Get off that bus.

        • El Tonno

          This is totally off-topic but what does “If treated as a country, American students of Asian descent ARE THE BEST IN THE WORLD.” even mean or how is it relevant to anything?

          If treated as a country, the best American students are THE BEST IN THE WORLD, too.

          If you want to go PISA, reading skills are smack-bang average, somewhere between Korea and Turkey.

  • truth

    Ron Paul “We never turned anybody away from the hospitals!”

    Typical right wing self-aggrandizing delusion. Ron Paul is a liar, plain and simple. People were and are consistently turned away, never mind the people who are not adequately treated at all. That is why we have such lousy outcomes in our healthcare as a nation, as opposed to the nations that have government run insurance programs (Medicare for all).

    • Oh, so you have knowledge of the same hospitals Dr. Paul worked at in the 1960s, and you saw them turning people away? Naw, I didn’t think so.

    • patrick

      Are you sure that the “lousy outcomes” are not an effect of the government mandates and insurance programs? I work for the government and it seems to me that govt programs/agencies usually achieve the opposite of their stated goals.

    • zee788

      there are plenty of hypocritical republicans, but i don’t believe ron paul is one of them. i can’t read minds, but if you look at all the other positions he takes, including his principled foreign policy stances, where he could get a lot further by abandoning them, he has been consistent and stuck by his principles. that’s why i believe him when he says this as well.


      People are not turned away. All you have to do is go sit in an ER for a few days and you will see that if you don’t have insurance, you still get treated and the bills are sent to the state to be paid from Medicaid funds. Hospitals always get paid from someone and always server everyone. The cost of those services are passed on to the tax payer.

      So, in reality, we already have a government healthcare system. It’s just that people are not allowed to opt for it instead of the market based health insurance offerings. Obamacare was designed to force everyone onto Medicaid and Medicare by making it too expensive for businesses to offer health care to their employees.

    • Krugman Is A Liar

      Please provide a source for the people Ron paul and his hospital turned away. Failing to do so would show that you are in fact the liar, but I am sure you wouldn’t make outrageous claims like that without proof, right?

      Thanks in advance.

      And what is really funny is that the same government that you advocate having a monopoly of power on health care, much as it does government schools with its amazing results, constantly turns people away and denies them medical care. Do a little research about how many people every year the government declares as not being really sick or injured if they are a veteran or if they have had social security taken out of their checks their whole lives.

      It goes on so often that there are tons of lawyers who specialize in just this very type of case.

  • Rosco1776

    Ron Paul 2012 or BU$T !!

  • Jon Daily

    Even with Medicare, Schip, Medicaid and government regulation 40,000 people die a year because they don’t have insurance. Libertarians are dishonest when they pretend that charity and the kindness of strangers would fill the gap. Krugman is absolutely correct that the likes or Ron Paul would gladly condemn huge numbers of people to death just to further their mad Libertarian experiments. A form of government that has never worked anywhere in the world and doesn’t exist anywhere in the world with the possible exception of Somalia.

    • greathornedlizard

      I have read that Haiti is a prime example of libertarianism, but I agree with your point.

      And if this madness is carried out it will be just a hop skip and a jump to exterminating the poor.

  • greathornedlizard

    It’s all over the place that a campaign manager for Paul had to quit and died in his forties, of cancer.
    Charity and friends raised 35 thousand of the 400 thousand dollar bills his family received.
    He was uninsured. Reference Thom Hartman for exact details.

    Now on the other hand, Ayn Rand helped herself to social security and medicare benefits in her last years…

    • patrick

      The fact that his bills were almost HALF A MILLION dollars shows that something is driving up costs.

      • greathornedlizard

        Yes, it’s called greed.

        • El Tonno

          No it’s called cartelized markets.

          Or else people striving to fix a body that ultimately cannot be fixed.

          These bills don’t go magically disappear or are financed by garden gnomes if “insured”, btw. It just means that resources that some other insured person might have needed are now gone forever. You will have a cancer survivor but maybe your neighbor’s grandma will be turned away now for a kidney operation.

          Economics cannot be wished away. Deal with it.

      • You have to realize that these bills are not always for draconian efforts. The bill sent to my insurance company for having a baby – regular birth, no complications, two nights in the hospital – in 1995! was $12,000. I’m still here, so having a baby is not something to do with my body that “couldn’t be fixed.”

    • Danielle

      He died of pneumonia. He was treated for weeks, in the hospital, even though he didn’t have insurance. He was a close personal friend of Dr. Paul’s and never “quit”, like you say. Your comments are bogus. What does Ayn Rand have to do with anything. Ron paul has stated numerous times that he was not a follower of Rand. He enjoyed some of her books, but there were things about her philosophy of Objectivism that he disagrees with. I bet you think he named his son after her, too. LOL Fail.

      • greathornedlizard

        I gave the Thom Hartman link because I did not remember the exact details, but no matter, the guy’s family had 400 thousand in medical bills, thanks to his cheapskate employer Ron Paul.
        And what Ayn Rand has to do with it is simply to show the hypocrasy of Rand, her followers and Ron Paul, unless of course, he doesn’t take part in the healthcare benefits and pension benefits that our Congresspeople generously reward themselves.
        I don’t care how Rand Paul got his first name, he’s disgusting, immoral and more.

        • Ron Paul was not responsible for Kent Snyder’s death, and what is disgusting and immoral is to suggest he was.

          • greathornedlizard

            What’s disgusting and immoral is your twisting.
            I wrote that the victim’s family got the bill thanks to said victim’s immoral employer, who I am guessing, most disgustingly takes taxpayer provided healthcare.

            Where did I write that the victim’s death was Ron Paul’s fault?

          • My apologies for mistaking your meaning as sharing that common theme I’ve read so much lately. However, Ron Paul was no more for his condition or his medical expenses than he was for his death.

    • zee788

      Yes, his campaign manager tragically died, but that actually had nothing to do with the fact that he didn’t have insurance. he was treated by the hospital regardless.


      The young man who dies, died from MSRA most likley and, he caught MSRA while in the hospital. If I were his wife, I would be looking for a lawyer.

  • Jon Daily

    Thank you for mentioning Ayn Rands hypocrisy. Not only did she take Social Security and Medicare but she did it under the name Ann O’Connor so that people wouldn’t know about it. This is typical of right libertarians. They are against all government spending except for the government spending they benefit from. Because they consider themselves “deserving” while others especially minorities are “undeserving”. Its not a political philosophy at all. It plain old fashioned selfishness. I urge all of your right-libertarians to look up the word “Sociopath”. You might find it hits home.

    • Danielle

      Ayn Rand was not a libertarian. She didn’t even like libertarians. LOL

      • greathornedlizard

        But she was certainly a sociopath..

        • greathornedlizard

          and a really, really sophmoric writer. It amazes me that people could be so clueless about literature.

    • Danielle
      • greathornedlizard

        Well for openers, this bit of doubletalk from the Gertrude Stein of imbeciles is from the Ayn Rand Institute, I am certain they are a most “objective” bunch, but it’s not important, just listen to her responses; she is an egomaniac without pedigree: get over this bimbo!

    • Krugman Is A Liar

      Not too many supporters of Ron Paul are actually fans of Ayn Rand. You would have to actually understand the subjects and their different philosophies though to know that, which of course doesn’t stop people like you from having such strong opinions.

      Anyway, as far as hypocrites, do you mean like the leftist politicians who want to refuse to allow private citizens to be able to defend themselves with firearms, yet either own their own or have large amounts of security carrying firearms? This would include Chuckie Schumer, Diane Feinstein, etc. Or those who advocate how important the public school system is like Obama/Emanuel/Clinton types, then send their kids to private school? Or like all the young liberal types who hated the Patriot Act and aggressive war abroad when their team wasn’t in power, but love it now that Obama is in power?

      To be fair, most people in both parties are the same way. I am just addressing what a ridiculous point it is with examples of people from your own side. I will say, however, that what is refreshing about Ron Paul is he is not a hypocrite like just about everyone I can think of in the GOP and Democrats. That is why his followers are so supportive of him.

      • Gee, I’m new on this site! Really??? I have never ever, not once, heard Schumer or Feinstein try to overturn the second amendment or in any way try to prohibit private citizens from defending themselves with firearms. “Krugman is a Liar” – you’re a liar!

        • quo warranto

          But they are both proponents of just about any gun control measure that is put forth. That is how they go about it. They go for what they think they can get, because right now, an outright overturning of the 2A would never get any traction. He’s not a liar, but more of a speculator. He is speculating based on past actions. And I think his points are valid.

  • Random

    Paul Krugman will go down in history as the biggest charlatan and short-term thinkers this world has ever seen. What a CLOWN!

  • zee788

    I agree with Ron Paul. I think Krugman is partially right, though, in that if suddenly government were yanked from under us tomorrow, people would just be waiting for someone else to take responsibility, rather than stepping up to take care of themselves and those others in their community who are vulnerable, like children or the sick. I think a gradual transition to Ron Paul’s world is ideal, in my humble opinion.

  • quo warranto

    If you were to visit sites like, where there is a high level of support for RP, you would find that there are libertarians and anarcho-capitalists who are in favor of dismantling the military. We (Paul included) don’t advocate feudalism, but rather self-governing. The only area where government brings any semblance of efficiency is in murder, theft and fraud. All of which are necessary for the sort of militant government we have in the US. The sort of government that is supported by both major parties. The R party you hate and the D party that I infer your support of from your arguments. I will not register with the R party just to help RP in the primary, because I don’t consent to be governed by any politicians. I do think, however that Paul is the only politician in the race for president who has any sort of workable real world answers rather than political strategies.

  • Adult

    1. It is clearly true that wholesale gov’t intervention in all markets, including health care, is so egregious, distorting and destructive that none of us under age 40 have ANY IDEA what could actually be accomplished without such interference.
    I imagine that things could work, in all markets, FAR better than they currently do.

    2. What is all of this emotional crap about people not getting the care they need and dying as a result? What is your point? Is everyone supposed to get perfect treatment and care at all times, regardless of cost? And regardless of how that person created his own disease problems by their own lifestyle choices? Probably 95% of all chronic disease is self-created. Why should you or I be forced to pay for the asinine lifestyle choices that others make for themselves?

    3. Continuing along these lines, what is the point of insanely costly medical and drug care keeping virtually vegetative elderly folks alive for months and years on end? The vast majority of health care (aka disease maintenance) costs are spent in the final several years of people’s lives.
    Why do that? And why are you and I forced to pay for it?

    • greathornedlizard

      well it’s true that folks can get world class care “free of charge!” in Cuba, but in the USA, not so much..
      Studies show that the most Ron Paulian medical care available is in McAllen, Texas, ( I know, it’s a cowpie state,) where doctors like Ron and Rand own all the clinics and hospitals, but it is what it is; and studies also show that the most expensive medical care is to be found in, you guessed it! McAllen Texas…who’da thought?

      • El Tonno

        > well it’s true that folks can get world class care “free of charge!” in Cuba


      • quo warranto

        Nothing is ever free of charge. The common people of Cuba have paid a horrific price in terms of overall quality of life in exchange for that dubious benefit. Just like we will in the coming years. Rotate those lizard eyes around and see the real world.

        • greathornedlizard

          They have paid a horrific price because the USA has been on a vendetta for what? sixty years?
          And why? Because our system of good ol’ boy crony capitalism is terrified of a good example.

  • greathornedlizard

    What. What? Speak English dammit!

  • Bill Gleed

    The writer is a bigger ignoramus and cold hearted bastard than the rest of you teabagging morons.

    • Hi Bill. In what way do you think I am a big “ignoramus” and “cold hearted bastard”? Please do tell.

  • Jdack

    Paul’s assertion that community and charity should cover the health care costs of people in said community who can’t pay on their own has already proven fallible.

    His aid died with $400,000 in medical bills. His friends and family set up a charity to raise money for the cause.

    What’d they get? Just over $34,000. Real helpful.

    Meanwhile, people who say “sure let’s let our community tax dollars and donations cover these types of things” are at the same time saying “but fuck the rest of the country.”

    It’s tribalism and it’s twisted.

    RP suggests one alternative to buying your own insurance, and it’s a shitty alternative, and his third option is: Go die then.

    • But this argument fails because if we had a free market health care system, as Paul favors, he wouldn’t have had such a tremendously expensive amount of medical bills in the first place for the community to help cover. You also just repeated the same falsehood that according to Ron Paul, if you don’t have insurance, your alternative is to “go die”.

      • Dan

        You’re right Jeremy, it should be “if you don’t have insurance, your alternative is to “go die poor”.

        The Free Market would not see a cheaper health care system, and even if it does, I mean, why would doctors want to be poor? Why do you hate doctors Jeremy? Somethings got to give Jeremy. Will the Free Market leaders take a profit cut in their margins to help reduce costs? What about the insurance stockholders and mutual partners? No, Jeremy, at least not right away. It would start with the individual first, the small man first. I mean, one can’t just say “Fu*k it! I’ll just deal with this cancer until the market corrects itself” huh Jeremy? I guess a whole mess of people could, but Free Market medicine is that one’s choice. How are we to interfere with the almighty Free Market Jeremy? Oh, and who’s more powerful? The stockholders or the individual? Before you answer, how’s Facebook doing right now on their invasion into people’s privacy? Who are they run by Jeremy? Doctors? Politicians? No, stockholders. The entrepreneurial Free Market spirit, Jeremy. God Bless Zuckerberg and those boot-straps. Perhaps he’ll start creating a lot of jobs and trickle down the economic favor to us poor people!

        You see, the people do end up revolting Jeremy. But not until they’re starving or being threatened with their life. Ron Paul’s message sparks of a minor inconvenience in the life of regular Americans, and only urgency in those that haven’t been able to open a history book since the 7th grade. Though Ron Paul’s supporters are notably more intelligent, or at least aware, of their political surroundings than die-hard Democrats and Republicans, I found those are also young kids with brains that move too quickly to pull together all of the implications of these policies on a global scale. Most Ron Paul fans that I know are fascinated by his message, then six months later realize what he proposes on a large scale is quite, well, insane Jeremy. Ron Paul grabs new people all the time, but his dutiful support hardly keeps up with the growth.

        I respect Ron Paul for his beliefs and being very consistent on the campaign trail, but his views are woefully abhorrent of the civil trials and injustices we’ve faced since the dawn of the industrial revolution and the rights we’ve put in place to correct those wrongs. And just because some rights have been abused, doesn’t mean all rights granted by the government post-Bill of Rights should be nullified, does it Jeremy? If so, perhaps you have some nice farm land, a artisan shop, a scholarly college or another form of journeyman-esque occupation for us all to assume – because we know the fore-fathers didn’t understand the power of the Free Market to corrupt Haves and besiege the Have-nots much like the Industrial Revolution did, right Jeremy?

        • Why do you ask stupid questions based on strawman logic like “Why do you hate doctors, Jeremy?”, Dan? When you want to have a serious discussion, let me know.

          I would only suggest for now that you take more time to actually listen to Ron Paul. If you did, you wouldn’t hold mistaken beliefs such as that the government grants people rights. You might learn a thing or two about the free market as well as about liberty.

        • Phillip

          “doesn’t mean all rights granted by the government post-Bill of Rights should be nullified”

          Rights granted by the government? You not getting Ron Paul’s point if you believe this statement. That’s all I have to say.

  • Will

    Informative article, Mr. Hammond. Well done. The context of Hayek’s quote was especially useful.

  • joshua miller

    Jeremy what you must remember is Krugman is only doing what his NWO masters tell him. So I don’t blame him. He is probaly afraid if he spoke out against Government they would institute martial law and waterboard him. Plus he has to be extra careful with that awesome Patriot act lurking around.

  • Krugman is a lost case, he has not read the austrians, he just does not know their core argument. What else did you expect?

  • Schiepers

    You should do an article on how Hayek’s work is compatible with non statist communism.

    It’s the core of the libertarian argument; people taking care of their communities, communities taking care of their members.

    Problem is scale. A million people can’t even be called a ‘community’ anymore. Let alone a ‘nation’of 400 million.