President Obama's comparison of his "public option" for health care with public colleges and universities is a flawed one, Gerald Prante argues at the Tax Foundation's blog.
Mr. Obama: "public colleges and universities provide additional choice and competition to students without in any way inhibiting a vibrant system of private colleges and universities."
Mr. Prante: "Public colleges and universities not only rely on billions of dollars in government subsidies (which he says the public option would not receive), public colleges and universities do indeed crowd out private colleges, largely because of these subsidies. For a California resident, UC-Berkeley (probably the best public university in the nation) is indeed a lower-priced substitute for Harvard University."
In fact, Harvard ends up having to spend more money on financial aid to attract students who might otherwise be lured by the taxpayer-subsidized low tuition at U.C. Berkeley. In that sense, the public option would drive down health insurance premiums in the same way it drives down discounted (non-sticker-price) tuitions. But in education, at least, these cost reductions come at some taxpayer expense.