For the latest episode of Econception, my podcast with the American Institute for Economic Research, I talked to Theo Merkel of the Paragon Health Institute about how the tax code affects health care. The most obvious way is through the tax exemption for employer-sponsored coverage, which is a big part of the reason why health insurance is so tied up with employment in the United States. We also talk about health savings accounts, Obamacare tax credits, and several other areas where tax policy and health policy overlap. Merkel co-authored a report for Paragon with Brian Blase that looks through the history of health care and the tax code.

I also discuss a piece about Chicago’s debt crisis that Judge Glock wrote for City Journal. Public debt becomes a threat to public safety because it crowds out the budgetary space for government to do the basic tasks it is supposed to do. Chicago is facing that crisis very acutely, but the federal government is on pace to end up in a similar place.

Finally, I look at the GDP per capita data for the U.S. compared to Europe’s. It really is stunning how far the U.S. is ahead of European countries we consider to be our peers. Not only that, the U.S. is pulling away, widening the gap over time. You can play around with the data on your own by clicking here.

For the Paper of the Episode, Theo picked a comment from economist Mark Pauly in the American Economic Review about moral hazard in health care from 1968. Pauly explained that full coverage is not optimal coverage, and Theo lays out why that’s the case.

Please listen and subscribe to Econception on your preferred podcast platform by clicking here.