Some of the predictable sniping occurred at Martin Heinrich's town hall on the health care bills Saturday. A noisy but minority cohort insisted on describing as socialism proposals to cover more low-income people with public funds and to establish a government-operated competitor for insurance companies.

Socialism as a theory says that the only input to production of any value is labor and therefore the only return from production should be to labor. As a practice, socialism generally means central planning and state ownership of factors of production.

I am not a big fan of the federal bail-out of GM and Chrysler. I have written in the Journal that I doubt the government-run insurance company that President Obama favors will make any meaningful difference to health care in America. I do not believe that any business is too big to fail.

But I am a big fan of calling things by their proper name. The people screaming about socialism at Heinrich's town hall were upset about the car company bailouts, the need of the government to recapitalize Fannie Mae, investments in Citigroup, loans and warrants in the finance sector. What they are upset about is not socialism but state capitalism -- state investment in the private sector.

There is a bunch of that around. The state of New Mexico invested in Eclipse Aviation. China's sovereign wealth funds have positions in natural resource companies. The United States owns stock in Citigroup.

Like any owner, sovereign owners have a say in how things are done, but they are no more interested in running the companies they invest in than is the average worker who owns shares of IBM through his 401K plan.

But here's the fun part: It turns out Uncle Sam has been a very saavy investor. We the taxpayers own 34 percent of Citigroup, and based on its recent stock price so far we've made $11 billion. (Citi is the only bank in which the U.S. government has an ownership stake.) We earned 23 percent on the TARP money we gave Goldman Sachs. In fact, it looks as if the government will make money on most of the deals it did during the financial turmoil of the past year or so.

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Uwe Reinhardt provided an intelligent and timely reminder of what economists mean by rationing.

Among the hot buttons in the health debate, especially at the contentious town halls congresspeople are sponsoring, is the idea that government will ration health care in some undefined way in some undefined future.

Reinhardt explains that the roll of pricing in a free market is to ration scarce resources. Those who are willing to pay a price get, those who are not willing to pay don't get. "In short," Reinhardt writes, "free markets are not an alternative to rationing. They are just one particular form of rationing."

The truth is, health care is rationed in the United States today, it was rationed before insurance became commonplace, it is rationed in Europe and in Canada, and it will be rationed no matter what Congress does in the next few months. It is a scarce resource and it has to be allocated somehow, either with a price mechanism or through regulatory fiat or by the time one must wait to receive care.

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The Journal has started a daily feature to try to answer as many questions as we can that our readers submit concerning the health policy legislation working its way through Congress. I've been assigned to collect the questions and put them in a computer file so that those of us who are supposed to answer them know where to find them.

I have been thoroughly impressed by the thinking behind these questions. Some of these questions are better than the answers I'm going to be able to give them. 

Readers have noticed that some of the arithmetic they're hearing in the media doesn't add up. How, they ask, can the marginal cost of adding new people to insurance rolls be so much higher than the average cost of coverage? They've noticed that the problem of manufacturing health care -- finding enough providers and improving the quality of care -- is treated more as an afterthought in this legislation. They are skeptical of Sarah Palin's irresponsible, outrageous and completely false claim that the bills contain "death panels" designed to withhold care from the elderly and disabled.

I'm surprised by how many people I'm hearing from who are content with the coverage they have. That doesn't mean they don't want to see other people get the help they need, but they don't want to fix what they don't see as broken. Many of the questions we are getting are about implementation details; readers indicate they can accept necessary changes, but they want to be clear about how these changes are going to look from their perspective.

Congressional delegates are said to be quaking at the thought of confronting professional provocateurs, planted political operatives and zealots whose only agenda is to prevent an intelligent discussion from occurring at constituent meetings and town halls.

If the mail I'm getting from our readers is an indication of the intelligence and good will abroad in New Mexico and America, I hope the Journal's readers show up en masse at every one of our delegation's town hall meetings. They will help our congressmen learn something.

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Matt Miller is one of my all-time favorite public policy writers. He used to write a regular syndicated newspaper column that the Journal published. He served in President Clinton's budget office, he is a McKinsey consultant and a fellow with the Center for American Progress,  which calls itself a progressive think tank. Miller offered another great commentary about health policy in today's Financial Times.

A lot of people have pointed out that our current system of linking health insurance to employment is an artifact of World War II price and wage controls and not a fundamental principle of Americanism that is enshrined in the Constitution. We might just as easily have evolved to a British or Canadian style plan, but it happened that because employers couldn't legally compete for workers during WWII with wage increases, they started offering health insurance benefits as a way to lure workers.The system has been with us ever since.

Miller makes a great case that the employer-based system is bad for workers, business and the economy.

Miller wrote that the system "may have made sense 50 years ago, when health care was cheap and business faced little global competition. But today's circumstances are radically different. Soaring health costs strangle business and absorb cash that could otherwise go to wages. The link between health care and employment explains why millions of Americans have lost coverage during this recession. Budding entrepreneurs with ill spouses or children stay in jobs they loathe for fear of losing the insurance they need."

The system persists for several reasons, Miller said. Some Democrats don't want to offer too strong a government-funded alternative out of fear of being labeled socialists (even though the Conservative Party has been in power in Canada for a long time and has lived quite comfortably with their country's national health plan).  Businesses don't want to take heat for shirking their responsibility to employees. Unions don't want to lose power by losing the opportunity to negotiate health benefits with employers. 

The solution, Miller said, is a "grand bargain." Business would shift health costs off its payroll and onto government and agree to provide the additional revenue government needs to take the risk. Miller envisions not a single payer system (something like Medicare for all) but a system that resembles the Dutch or Swiss systems. Those systems require everyone to have basic coverage; they establish insurance exchanges that allow individuals to pick the coverage they need from private companies; and they help pay for the coverage for people who can't afford the entire cost. 

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