In computer science there are obvious errors that prevent software from running but there are also obvious errors where everything works reasonably well. For example, you may have a database where one of the fields is destined to always contain the same (therefore pointless) value. The program may function and seem to work properly, but that does not absolve the error.
Politics is full of such errors. The saddest one in my opinion has to do with health care in the USA. I’ve been saying for well over a decade that the bulk of America’s health care woes can largely be completely cured by correcting a tiny but devastating error. The cure is to simply prohibit employers from offering health care benefits.
At first this seems ridiculous. If we need more health care (options, etc) why would we eliminate the bulk of coverage? Employer sponsored health insurance is like opioid addiction — it was maybe well intentioned at first, but as it grows increasingly problematic, it is very hard to kick.
In this article titled "The Illogic of Employer-Sponsored Health Insurance", the problem is characterized by a brilliant analogy where the medical profession is compared to a pickpocket who steals money from you in a bar and then buys you a drink. In the current system, instead of trading your service as a worker for properly fungible money to apply in a free market economy, you get paid in two separate currencies, money and health care, which for most people are not interchangeable at all. Yet for the insurance companies and medical profession this layer of obfuscation is a windfall.
Ask yourself if life would be better if your employer paid for car insurance. If you assume that your employer will just simply deduct that cost from your salary, pretty much all you can expect will be a much more limited range of insurance options, some hidden markups, and friction changing to a better provider.
And it’s not like employers actually want to mess with your health care. It’s as huge of a hassle and impediment to market fluidity for employers as it is for employees who can feel stuck at jobs with acceptable benefits. Perhaps the most glaring example of the nonsensical nature of this system is my employer who happens to be the largest health care provider in San Diego. If they wanted to give their employees a health care benefit, why not just give them a big price break on our own health services? If you consider that obvious question, it’s easy to suspect that something rotten is going on.
There are two other industries that I can highlight that have similar errors. Today, tax preparation is an absurd and immoral business that resists proper obsolescence with massive lobbying by tax preparers. That one is extraordinary because I don’t think people even feel like the pickpocket here is buying them a drink.
The most "generous" thieves in the bar are the mortgage bankers. Thanks to the mortgage interest deduction, people think they are getting a sweet kickback on the most expensive purchase of their lives. But the reality is like anything the government subsidizes—it stimulates more business which causes demand pressure and higher prices. The losers are renters who don’t get the kickback and society in general who must dedicate more pointless resources to housing. The winners, of course, are mortgage bankers and anyone dealing with real estate who are paid in fractions of the purchase price (builders, brokers, etc). The difference between the government printing special banknotes that can only be used to pay mortgage bankers and just giving mortgage bankers a lot of money is essentially nothing.
But the thought of losing this kickback for those lucky enough to claim it is enough to generate an enormous fuss. Even though this is clearly an obvious system error designed to enrich bankers, fixing it would be painfully unpopular. (So unpopular it’s practically a Green idea.)
That’s why I’m shocked to see the GOP proposing some kind of bug fix that partially corrects this sacred cash cow. I sometimes think Trump’s policy initiatives are purely random. Like a broken clock telling time twice a day, maybe this is his moment to do something extremely unpopular but constructive.
(Yes, I know, they want to take the entire kickback and divert it to their upper class twit cronies. I’m actually ok with this for the same reason I said that if the Affordable Care Act consisted only of beating people with sticks it would be worth doing — at least the new stupid system won’t be an entrenched stupid system.)
UPDATE 2019-12-04
Inconceivably, the Trump Tax Cuts and Jobs Act belies its fatuous name by doing something useful and actually delivering on the promise to reduce the mortgage interest tax deduction, i.e. reducing kickbacks to real estate parasites.
The Tax Policy Center says:
Mortgage interest. TCJA limited the deduction to the home mortgage interest on the first $750,000 of mortgage debt (reduced from the pre-TCJA limit of $1 million of mortgage debt) for mortgage loans taken out after December 15, 2017. In addition, homeowners may no longer deduct interest paid on home equity loans, which was allowed for loans up to $100,000 before TCJA, unless the debt is used to buy, build, or substantially improve the taxpayer’s home that secures the loan. Homeowners may still deduct mortgage interest on their primary residence and a second home.
Just to understand how extraordinary that is, here is Ralph Nader answering questions as the Green Party candidate for president of the USA.
Q: The McMansion Tax Break — Taxpayers can deduct interest on loans of up to $1 million used to buy one or two personal residences. Would you limit the home mortgage interest deduction so that it subsidizes the purchase of one basic home, and would you redirect some of the tax savings to help qualified renters purchase a basic home?
A:Yes.
Q: The Inequitable Home Equity Break — Congress offers less than certain homeowners preferential deduction for consumer loans. Would you limit the deduction for interest on up to $100,000 of consumer loans (called "home equity loans”) that benefits only homeowners who itemize?
A: Yes.
UPDATE 2020-04-13
As John Oliver, reporting weeks into the Covid19 event, says in this video:
"More broadly, we need to seriously think about whether having our health insurance system so tied to employment is a good idea, because I would argue that it emphatically isn’t."
It really is obvious from either a left or right perspective. The only perspective where it is not obvious is if you are lucky enough to have a job which provides health care. It’s hard for people to understand something when their compensation package requires them to not understand it.