The term “moral hazard” is used in economic circles. Here it is: “The risk that a party to a transaction has not entered into the contract in good faith, has provided misleading information about its assets, liabilities or credit capacity, or has an incentive to take unusual risks in a desperate attempt to earn a profit before the contract settles.” It is the last part of the definition that has gained some popularity, usually amongst conservatives.
The example of moral hazard is taking out an insurance policy. Since your car is insured against theft, for example, you may not be as careful securing it when parked as you would be if you had to pay for the cost of replacement yourself. So now extend this to the health care debate: people will be careless with their health if they are insured because someone else will pick up the medical bills.
This insight leads some to the philosophical position they already hold, namely, people do best when fully responsible for their own actions. When government gets involved, there is less personal responsibility. Or, as they have it, people are less virtuous when there is a safety net.
This is a sophisticated rationale for the conservative economic agenda since Reagan. Moral hazard has little to do with morality and much to do with moving forward an ethical position in which compassion and care for the less fortune is taken out of the realm of public care and thrown back onto the needy themselves.
All this while the super-wealthy 1% of much of America’s wealth, the gap between the super-wealthy and the rest grows, the middle-class slips downward and the rich are subsidized by the government and bailed out by everyone else.