Cliff Stearns: “As we return from recess to write and act on legislation for a Medicare prescription drug benefit, I am asking my…”

“As we return from recess to write and act on legislation for a Medicare prescription drug benefit, I am asking my colleagues and the American people to resist the temptation to succumb to price controls. This is perennial around here. A lot of folks believe that price ceilings for pharmaceuticals to be a feasible solution to the high costs that we experience with pharmaceuticals, but they never work. Against the advice of economic advisers, including Nobel Prize-winning economist Milton Friedman, one President instituted a broad range of price controls in August of 1971; but many of the Members saw the PBS series 'Commanding Heights' last year in which the author, Daniel Yergin, recalled 'the public was convinced that food prices were going up,' so the President 'opted for wage and price controls. Voters liked the price controls, and the President was reelected in a landslide.' Owing to that we can control prices but we cannot control the laws of supply and demand, the economy did not respond as the President hoped it would. Mr. Yergin said, 'Right away, the economy went out of whack; people couldn't cover their costs. Ranchers stopped sending their cattle to market. Farmers started drowning their chickens. Instead of controlling inflation, they were controlling shortages.' To those old enough to remember 1971, remember those price ceilings? Lines for gas were all over the place for our cars. Black markets were started.”