That argument just won't fly in the US, for a variety of reasons. People decry the so-called "welfare state", so it won't work politically. Unemployment insurance in the US is a gigantic pain in the ass for everyone involved, and it's already overtaxed. Not to mention the fact that it's just bad juju to put more people out of work than already are. US unemployment is at something like a 25-year high, double what it was just a couple of years ago. Add on to that that it's administered by the states and not by the federal government, and that's just a recipe for disaster.

I could argue that what you're suggesting is a broken-window argument, too, that by breaking the window of insurance industry employment, there are net benefits.

What I think we can all agree on is that whatever course is taken — whether it be government-controlled insurance or private insurance, or we do nothing at all — there's still a broken window.