When should governments provide social insurance, and when should it be left to private markets?

[Man]

For my Economics of Social Issues course.

thanks!

[simplicitus]

1. The private markets almost always fail when it comes to insurance. This is especially true for medical insurance (as Nobel Prize winner Kenneth Arrow showed)
http://economix.blogs.nytimes.com/2010/0...-morality/
http://www.maxineudall.com/2010/12/anoth...costs.html
but also in pensions (consider the number of companies that have declared bankruptcy leaving their employees without pensions; the number of retirees who lost heavily when the stock market tanked at the beginning of the recession; etc.) and even with unanticipatedly major natural disasters (consider the problems with insurers after Hurricane Katrina, etc.)

2. So do you want a pragmatic answer (which works better), a philosophical answer (the private market is the right way to go because it is the right way go [even if the results aren't any good]; government should be kept small on principle, even if there are things it does better; etc.), or a selfish one (the health care industry bribes doctors, politicians, etc. so it is in my interest to say private)?

3. By every measure, people in the northern European countries have higher standards of living than Americans do.
http://www.prosperity.com/
http://streetlightblog.blogspot.com/2011...r-two.html
http://voices.washingtonpost.com/ezra-kl...s_how.html
http://lanekenworthy.net/2010/11/17/when...-the-poor/
http://economix.blogs.nytimes.com/2011/0...-we-trust/
http://www.scientificamerican.com/articl...fare-state
http://baselinescenario.com/2010/09/28/a...-in-sweden

So it is hard to argue they are doing every wrong.

[Anjaree]

If you have to pay insurance fees,you are in the private hands. But if you to pay taxes, you are in the government hands.Just look at the Medicare,Medicaid to find the difference in services.