As we approach the end game of the health care debate, we need to ensure that the system that emerges encourages both competition and good management. This does not preclude a public sector insurance provider, but it means that if we go that route we need to ensure that it does not evolve into a monopoly. We also need to consider the size and scale of the organizations that are developed to deliver health insurance. While organizations that are too small do not benefit from economies of scale, organizations that are too large can develop dysfunctional, slow-moving bureaucracies. You know them—organizations like the . Department of Transportation, and the pre-2009 General Motors Corporation. My concern about the health care debate is its focus on ideological litmus tests. A better idea would be to pay attention to more pragmatic issues related to cost-effective service delivery and effective, innovative management.
Ideas about the best tools for stabilizing the economy changed substantially between the 1960s and the 1990s. In the 1960s, government had great faith in fiscal policy -- manipulation of government revenues to influence the economy. Since spending and taxes are controlled by the president and the Congress, these elected officials played a leading role in directing the economy. A period of high inflation, high unemployment , and huge government deficits weakened confidence in fiscal policy as a tool for regulating the overall pace of economic activity. Instead, monetary policy -- controlling the nation's money supply through such devices as interest rates -- assumed growing prominence. Monetary policy is directed by the nation's central bank, known as the Federal Reserve Board, with considerable independence from the president and the Congress.