Removing the middleman

The Obama administration apparently wants to take over the student loan market, and they want to do it as part of the health care plan. The Washington Post explains:

Under the proposed legislation, the Federal Family Education Loan program that includes private lenders would end on July 1 and all federal loans would be issued through the government.

Granted, the government already controls the student loan market and takes on the default risk of most of these loans, so by eliminating these private companies that originate and service the loans, there will be some savings. That is precisely the argument that the administration is making:

Obama administration officials have argued that the change would amount to nothing more than removing the middlemen from transactions that allowed lenders to pocket billions of dollars in profit at the expense of taxpayers.

In other words, if the government is going to subsidize, control and regulate the entire market for student loans, why waste money on these private sector companies who are profiting from these taxpayer subsidies? Why not just remove the middleman?

This is an excellent demonstration of how the proposed health care bill can eventually lead to a single payer system. That's because the health care industry under Obamacare will look very much like the student loan market - it will be federally controlled, heavily subsidized, and private companies (in this case health insurance companies) will act as middlemen who profit from taxpayer subsidies.

Once premiums continue to rise, and the government's fiscal situation continues to deteriorate, perhaps to the point of a genuine fiscal emergency, the government can simply propose: "If we just cut out the middleman - those greedy, profit-seeking insurance companies - look at how much money we can save!" And voila, we have a single payer system.