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Ezra Klein:

The paper “No Discount: Comparing the Public Option to the Coupon Welfare State,” by Roosevelt Institute fellow Mike Konczal, is a useful companion to Teles’ tale of kludgeocracy. While Teles surveys a broad trend in governance, Konczal drills deep into a single policy dilemma that we confront repeatedly: Whether to provision public services directly, through government-run programs, or to use government as “a giant coupon machine, whose primary responsibility is passing out coupons to discount and subsidize private education, health-care, old-age pensions and a wide variety of other primary goods.”

In recent years, the “coupon machine” theory of American governance — exemplified by vouchers and tax subsidies — has been ascendant. That’s how most of Obamacare works. It’s also the foundation of Republican efforts to reform Medicare and education.

Note also, as Klein does not, that participation in ObamaCare is mandated.

As Konczal argues, “The advantages associated with vouchers are ones of choice, efficiency, competition, budget control and incentive management.” But there are disadvantages, too. For instance, because a privatized welfare state is more opaque and complex than a public one, it creates “new coalitions of business interests, providers, middlemen” who profit from it. The result is not only less democratic control and accountability, but also less efficiency. Understanding when to choose a direct public provision and when to opt for coupons is a crucial task. Konczal’s paper provides an excellent basis for devising a general theory.

Weirdly, Klein seems to think that public purpose has some influence on how to "choose." If he'd asked himself which approach rentiers prefer, that would have been a more appropriate methodology.

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