On Wed, 24 Oct 2001, somebody wrote:
Federalizing or socializing the costs of security is like federalizing or socializing flood insurance: it takes the efficiencies of the market away and creates distortions.
It has two advantages over a strict free market model however. The fist is the market is larger with respect to ability to cover damages because it spreads the cost out over a larger group. This has two effects. First it lowers the average cost per user and second during critical emergencies you can raise larger sums of capital by increasing the average payout. Especially damages that accrue all at once outside of 'normal' statistical expectations. A sequence of man made and natural disasters would be one example. The flip side is to realize that this works for transient spikes only. Otherwise it's simply robbing Peter to pay Paul (ie Communism). The second aspect is that the market players are likely to be more stable from a total lifetime perspective. In some cases this accrues from the stability of the government, in others this economic breadth stabalizes the government. -- ____________________________________________________________________ The people never give up their liberties but under some delusion. Edmund Burke (1784) The Armadillo Group ,::////;::-. James Choate Austin, Tx /:'///// ``::>/|/ ravage@ssz.com www.ssz.com .', |||| `/( e\ 512-451-7087 -====~~mm-'`-```-mm --'- --------------------------------------------------------------------