Posts Tagged ‘Medicare’

Paul Ryan’s America

Monday, April 18th, 2011

 

Paul Ryan launched an attack on Barack Obama’s deficit speech last week — calling it “excessively partisan.”

Which is interesting considering his own approach to the budget deficit which he called “an existential threat to all we hold dear”: Balance the budget without offending a single Republican.

Over a year ago, I described the conundrum Republicans faced as the deficit they were fuming against was largely a result of policies that benefited their own constituencies. Those over 55 who were the only demographic group to vote Republican (even in the Democratic wave years of 2006 and 2008) benefited the most from the trillion dollars spend on Medicare and Social Security. Our military spending nearly matched the rest of the world’s combined — and if you include other national security spending — totaling another trillion. And then there were the various tax incentives and loopholes for big corporations adding up to another few hundred billion dollars. Further, Republicans were committed to not raising taxes on anyone — especially the richest.

Paul Ryan was faced with the unenviable task of squaring this circle. In an effort that nearly everyone described as “serious,” Ryan managed to put forth a plan with no prospect of passing at all — and one that managed to place the entire burden of balancing the budget on the backs of Democratic constituencies. The military was left alone. The base of the Republican party and driver of most of the debt — the elderly — was left alone. Corporations were rewarded with a lower tax rate with some vague talk of eliminating their enormous tax subsidies.

Though Ryan kept saying the pain of balancing the budget would be shared by everyone — his plan was really about cutting off support for those left behind in our society. The rich and elderly were rewarded — even as they accumulate more and more of the nation’s wealth; the middle class were mainly left alone; and the young and the poor were cut off.

That doesn’t sound like the path to a dynamic and prosperous society to me.

Paul Ryan’s future is one where my generation must be prepared to support our parents as they become the test subjects in the biggest social experiment in history: As Medicare becomes a voucher program growing at much lower than the rate of health care inflation, in the hopes that this will slow it down. Meanwhile, my generation must be saving more than any generation in history as we prepare to pay for our own medical costs.

Ryan’s plan is many things:  If taken seriously, it is an attack on all non-Republican constituencies. If implemented, it would be a grand ideological experiment that barely considers the lives of those it would affect which Republicans would normally call “social engineering.”

But most of all, the Ryan plan is (as Slate‘s John Dickerson said in Friday’s Political Gabfest), a “bold negotiating position.”

[Photo courtesy of Gage Skidmore licensed under Creative Commons.]

 

Must-Reads of the Week: American Power, Inequality, 1 Billion Heartbeats, Hacking Life, Anthora Cups, Structural Deficit, Financial Doomsedays and Crises, China, the Tea Party’s Views on Immigration, and Lady Gaga

Friday, April 30th, 2010

There were a lot of good articles and posts I came across this week — so brace yourself…

1. The American Power Act. David Brooks makes the case for progressive reform — specifically the American Power Act regarding climate change:

When you read that history, you’re reminded that large efforts are generally plagued by stupidity, error and corruption. But by the sheer act of stumbling forward, it’s possible, sometimes, to achieve important things…The energy revolution is a material project that arouses moral fervor — exactly the sort of enterprise at which Americans excel.

Matt Yglesias had earlier this week critiqued Brooks (among others) for taking the exact opposite stance of the one he was adopting here:

Oftentimes in the Obama Era the difference between “reasonable” conservatives (David Brooks and Greg Mankiw often leading the charge) and reasonable liberals has been that reasonable liberals look at flawed legislation that would improve on the status quo and support it while “reasonable” conservatives look at flawed legislation that would improve on the status quo and oppose it, while claiming to support alternative flawed proposals that they don’t actually lift a finger to organize support for within their own ideological faction.

2. Inequality, social mobility, and the American Dream. The Economist had a good piece that can serve as a starting point for a post I’ll be writing soon on inequality, social mobility, and the American dream:

The evidence is that America does offer opportunity; but not nearly as much as its citizens believe.

Parental income is a better predictor of a child’s future in America than in much of Europe, implying that social mobility is less powerful.

3. The Science of Life. Jonah Lehrer for Seed magazine has a brilliant piece on how cities are like living organisms. As a side matter, he notes this beautifully poignant data point:

[A]n animal’s lifespan can be roughly calculated by raising its mass to the 1/4 power. Heartbeats scale in the opposite direction, so that bigger animals have a slower pulse. The end result is that every living creature gets about a billion heartbeats worth of life. Small animals just consume their lives faster.

4. Fine-tuning life. Gary Wolf for the New York Times Magazine explains how the accessibility of computers is creating data about every aspect of our lives — and of the efforts of some people to begin to catalog and find insights in their own data. Surprisingly, Lifehacker was never mentioned.

5. The Anthora Cup. Margalit Fox of the New York Times writes the obituary for Leslie Buck, the designer of the Anthora cup:

It was for decades the most enduring piece of ephemera in New York City and is still among the most recognizable. Trim, blue and white, it fits neatly in the hand, sized so its contents can be downed in a New York minute. It is as vivid an emblem of the city as the Statue of Liberty, beloved of property masters who need to evoke Gotham at a glance in films and on television.

6. Unified Theory of the Financial Crisis. Ezra Klein synthesizes various narratives into a unified theory of the financial crisis.

7. The Structural Deficit. Donald B. Marron provides a coherent and reality-based conservative look at America’s structural deficit. Absolutely a Must-Read.

8. The Financial Doomsday Machine. Martin Wolf dedicated his column in the Financial Times last week to describe the “financial doomsday machine“:

[T]he financial sector has become bigger and riskier. The UK case is dramatic, with banking assets jumping from 50 per cent of GDP to more than 550 per cent over the past four decades…The combination of state insurance (which protects creditors) with limited liability (which protects shareholders) creates a financial doomsday machine. What happens is best thought of as “rational carelessness”. Its most dangerous effect comes via the extremes of the credit cycle.

9. Realism on China. Stephen Walt explains his take on China’s strategic ambitions — and its inevitable rivalry with the United States and other regional powers.

10. The Tea Party & Immigration. Radley Balko explains his take on the widespread support among the Tea Party for the massive government power grab that is Arizona’s new immigration law:

It also makes a mockery of the media narrative that these are gathering of anti-government extremists. Seems like in may parts of the country they’re as pro-government as the current administration, just pro-their kind of government.

Coincidentally, I made that exact point about the Tea Party back in September 2009 entitled: These Protests Aren’t Against Big Government, But About Liberals Running the Government.

Andrew Sullivan piles on:

Worse, on the fiscal front, they’re total frauds. They have yet to propose any serious cuts in entitlements and want far more money poured into the military-imperial complex. In rallies, the largely white members in their fifties and older seem determined to get every penny of social security and Medicare. They are a kind of boomer revolt – but on the other side of that civil conflict, and no longer a silent majority. In fact, they’re now the minority that won’t shut up.

More and more, this feels to me like an essentially cultural revolt against what America is becoming: a multi-racial, multi-faith, gay-inclusive, women-friendly, majority-minority country.

11. Sovereign Debt Crisis. Felix Salmon and Paul Krugman are both very pessimistic about how Greece will get out of this crisis — and what it means for the global economy.

12. Lady Gaga’s Ambition. Brendan Sullivan for Esquire chronicles the life and ambitions of Lady Gaga:

“There is a musical government, who decides what we all get to hear and listen to. And I want to be one of those people.” The girl who said that didn’t yet have the number-one hits (although she had already written most of them).

She was not yet the creative director of the Haus of Gaga, which is what she calls the machine of more than a hundred creative people who work for her. She didn’t make that statement in an interview or from the stage. She made it in 2007, when she was a go-go dancer sewing her own outfits and I was her DJ. She wrote it in one of my notebooks…

Lady Gaga is a student of fame, and the fame she studies most is her own — being famous seems to both amuse and fascinate her.

[1st image by me; 2nd image by LarindaME licensed under Creative Commons.]

Evaluating Mitt Romney’s 2012 Candidacy (cont.)

Tuesday, April 6th, 2010

Jonathan Chait:

I really would like to see Romney explaining to Republican voters that his plan is different than Obama’s because his didn’t cut Medicare. It might even work. It would just be hilarious.

Real Fiscal Responsibility & Deficit Politics: Introduction

Wednesday, December 9th, 2009

Last week I wrote a semi-irresponsible post about how Republicans are waging a generational war* by opposing fiscally responsible health care legislation. It was a variation on the common refrain from the right that all sorts of government programs are in fact “generational theft.” This memorable phrase was coined by John McCain to describe the stimulus bill, but there is nothing in principle to distinguish it from all deficit spending.  Bill Frezza writing in Real Clear Markets in a more recent example of this right wing meme called Social Security “a Ponzi scheme” which in which the younger generations are being screwed. The general message of the “generational theft” meme is that the young shouldn’t expect to benefit from government spending – but should only see it as a burden.

Few would dispute that it is my generation that is being screwed if our current policies remain in effect. The deficit we face now is big but manageable. But the real reason we are being screwed is that the projected deficits are not manageable, specifically because of the rising costs of Medicare. (Graph source: CBO.)

We know that projected spending is unsustainable: so the question moves to why has this issue not been addressed? To answer that, you need to look at who benefits from the status quo and wants to protect it. The federal budget and tax system consists primarily these components:

  • Entitlement spending on the elderly, mainly Medicare and Social Security, which together represent the largest projected expenditures of the federal government. (For 2010, Medicare about $453 billion and Social Security about $695 billion.)
  • Military spending. (For 2010, $664 billion. Or as commentor John Rose points out, including non-DOD military spending, the total would come to somewhere in the $900 billion range.)
  • Medicaid and other aid to the poor. (For 2010, $290 billion on Medicaid; some portion of the $571 billion in “other mandatory spending.”)
  • Interest on the debt. (For 2010, $164 billion.)
  • Subsidies to corporations in the form of tax loopholes which makes our effective corporate tax rate among the lowest in the world (even while the nominal rate is among the highest.) Also, more traditional subsidies to large corporations in favored industries, specifically agriculture. (More than $75 billion on tax subsidies; some portion of the $571 billion in “other mandatory spending.”)
  • Education and infrastructure. (Combined, for 2010, about $120 billion, plus some portion of the $571 billion in “other mandatory spending.”)

People of all political stripes acknowledge the approaching fiscal apocalypse, but each party’s responses and proposed solutions have been shaped by their core constituencies and their ideology.

The next two posts will explore each party’s approach in more depth, but in short:  Republicans, believe government is the problem; yet as the currently elderly, along with big corporations and the military are core interest groups and the primary beneficiaries of the status quo, they implicitly propose a deal whereby they maintain the status quo today – and then eliminate or drastically reduce entitlement spending on future elderly, the young Democrat-voting generation now, as well as, presumably, shrinking the government by eliminating other spending programs that do not benefit their interest groups.

The Democrats meanwhile, believing government programs can work, propose a three-step approach culminating in a “grand bargain,” to finesse the issue:

  1. Get the GDP growing again. A growing economy expands the tax base and reduces welfare spending, and – most important – reduces the size of the deficit in relation to the economy making it easier to pay off.
  2. Curb the growth in health care costs – thus alleviating the biggest factor leading to the explosion of the deficit.
  3. With these two factors relieving pressure, strike a Grand Bargain. Either through a technocratic commission or through bipartisan legislation, push through some combination of taxes and adjustments to current programs to make them sustainable.

Both of these plans are risky. But any path we choose now will be risky – due to the incredible and seemingly deliberate starve-the-beast-style (see next post) fiscal irresponsibility of George W. Bush’s administration, coupled with a downturn and the looming fiscal crisis.

Part 2 on the Republican approach found here. Parts 3 and 4 discussing the Democratic approach and then lessons from this moment of “welfare scleroris/imperial overstretch” coming tomorrow and Friday.

*I know that’s a bit unfair, a bit too pithy to be true. But the simple messaging – the oversimplification – can be a useful tool to get people to think if it is not used to reinforce the conventional wisdom. All too quickly, using such an oversimplified scheme, one can come to the wrong conclusions – which is part of the reason George Orwell in his “Politics and the English Language” stressed using original phrases. The first time one encounters such a phrase – it can prompt thought. But all too quickly, it solidifies into dogma and ideology.

[Image by Vermin Inc licensed under Creative Commons.]

The Un-American Pledge, Nietzsche (Republican), Islamists, Anti-Statism, Health Care Reform (again), and Abortion Politics

Wednesday, November 25th, 2009

Today, I present to you an early addition of the best reads for the long Thanksgiving weekend…

1. The Un-American Pledge. Michael Lind explains why the Pledge of Allegiance is un-American.

2. Nietzsche was a Republican. The Economist’s Democracy in America discusses Medicare and Nihilism. As it is undeniable that America’s population is aging, and that this accounts for the massive projected deficits in the future, and as everyone also acknowledges that such deficits are unsustainable, something must be done. The health care plans proposed by the Democrats include – along with various experimental measures to restrain health care spending – a Medicare commission “empowered to make decisions that automatically become law unless Congress comes up with equivalent savings” that will reduce spending as much. Republicans and the blandly smiling wise men and women of the pundit class have made it a point of conventional wisdom that Congress won’t be able to push through the cuts, and will find a way to circumvent this mandate. DiA, echoing a point Ezra Klein has been making repeatedly for the past few weeks, challenges those criticizing the plan to come up with something better:

If you don’t think an independent Medicare commission empowered to make decisions that automatically become law unless Congress comes up with equivalent savings will do the trick, then you have a responsibility to suggest something that will. Otherwise you’re just placing a bet that America’s government is going to self-destruct—a tenable argument, certainly, but not very helpful.

3. Learning from former islamists. Everyone else seemed to recommend this article a few weeks ago when it came out, but I just got to it recently myself. Johann Hari interviewed a number of former islamists who have recently renounced islamism and have begun to fight for their version of a “secular Islam” in Great Britain. He portrays this group as a vanguard. One of the islamists, Maajid Nawaz was a recruiter for an islamist group in Egypt for a time. Nawaz’s description of factors affecting recruitment seems to coincide with both intelligence agencies’ and liberals’ judgments, and to contradict the right-wing understanding:

“Everyone hated the [unelected] government [of Hosni Mubarak], and the US for backing it,” he says. But there was an inhibiting sympathy for the victims of 9/11 – until the Bush administration began to respond with Guantanamo Bay and bombs. “That made it much easier. After that, I could persuade people a lot faster.”

Eventually, Nawaz was imprisoned in Egypt. He was abandoned by the islamist group that he was working for. The only forces protecting him, as a British citizen, were forces he considered “colonial” and corrupt:

“I was just amazed,” Maajid says. “We’d always seen Amnesty as the soft power tools of colonialism. So, when Amnesty, despite knowing that we hated them, adopted us, I felt – maybe these democratic values aren’t always hypocritical. Maybe some people take them seriously … it was the beginning of my serious doubts.”

4. Anti-Statism: As American as Apple Pie. John P. Judis of The New Republic delves into the undercurrent of anti-statism in the American psyche.

5. Getting depressed about the public option. Timothy Noah depressed me more than anyone else with his ruminations on the public option.

6. Feeling better about health care reform. These pieces by Ron Brownstein and Andrew Sullivan though have made me feel much better about health care reform in general. Brownstein’s piece is especially helpful in looking at the various cost-cutting measures in the bill, and has a rather optimistic take. President Obama has apparently made that post “required reading” among White House staff. I’ll be following these posts up at a later date.

7. Abortion politics. The New Yorker had an extraordinary interview about abortion politics with Jon Shields. Shields seems to be, himself, pro-choice, but he seems to have reached an understanding of abortion as an issue which contradicts the propagandistic rhetoric that passes for most liberal commentary on abortion, which presents its opponents as being mainly concerned with keeping women in their place.

[Photo by road fun licensed under Creative Commons.]

They called Medicare and Social Security “tyranny” too.

Tuesday, August 18th, 2009

Of those who are opposing health care reform, there are a few general groups:

  • There are those who are wary of any change in the status quo, even while they realize it is unsustainable;
  • There are those who are misinformed on one aspect of the legislation or another – whether they think the plan is “radical” or that it has “death panels;”
  • There are those who are opposed for partisan reasons – one of these is Senator Chuck Grassley who – though he is the key Republican whose support the Democrats are trying to win – admitted he would not support a bill he agreed with if enough Republicans didn’t support it with him; others in this camp are – of course, Bill Kristol who advised Republicans to “kill” reform and Senator Jim DeMint who said he wanted to make health care reform Obama’s “Waterloo;” and
  • There are those are ideologically opposed – who are inciting much of the most extreme rhetoric about this issue. The leadership promoting this – as Rachel Maddow aptly demonstrates – oppose and want to dismantle the programs most Americans support. They consider Medicare and Social Security to be “tyranny” and “creeping socialism” and all those other buzzwords that they are now using against health care reform. In this clip where Maddow confronts former congressmen, majority leader, and one of the major organizers of the tea parties and the anti-health reform activists , Dick Armey:

As Maddow said – it is a very important point. Many of the Republicans participating in this national “conversation” are hiding their true beliefs.

Most Americans do not consider Medicare and Social Security to be “tyranny.” Those who are inciting fears about health care reform do.

Krugman Summarizes the Health Care Problem

Tuesday, August 4th, 2009

While researching a few facts about health care, I came across this excellent Paul Krugman article on health care in the New York Review of Books from 2006. Anyone who wants a good overview of the debate should check out the article in full – but here are a few highlights.

Krugman sees the growth of health care costs as being driven by new technology but exacerbated by aspects of our private system. He includes this informative graph to demonstrate the significance of health care spending:

He points to a study which quantifies the difference in spending between private and public health care plans:

For example, a study conducted by researchers at the Urban Institute found that

per capita spending for an adult Medicaid beneficiary in poor health would rise from $9,615 to $14,785 if the person were insured privately and received services consistent with private utilization levels and private provider payment rates.

He points to another study which tracked the changes in the growth of spending in Medicare and private insurance:

Comparing common benefits, says the Kaiser Family Foundation,

changes in Medicare spending in the last three decades has largely tracked the growth rate in private health insurance premiums. Typically, Medicare increases have been lower than those of private health insurance.

He makes a good point (with his wry wit) about the fragility of Medicaid:

Unlike Medicare’s clients—the feared senior group—Medicaid recipients aren’t a potent political constituency: they are, on average, poor and poorly educated, with low voter participation. As a result, funding for Medicaid depends on politicians’ sense of decency, always a fragile foundation for policy.

Krugman also points out yet another study which demonstrates how a market-based approach does not necessily lead to better health results – or even cheaper results – as bad choices in the short-term often lead to expensive treatments in the long-term:

A classic study by the Rand Corporation found that when people pay medical expenses themselves rather than relying on insurance, they do cut back on their consumption of health care—but that they cut back on valuable as well as questionable medical procedures, showing no ability to set sensible priorities.

Finally, Krugman continues to make the case that our health are system is simply not the best one out there:

The data in Table 1 show that the United States does not stand out in the quantity of care, as measured by such indicators as the number of physicians, nurses, and hospital beds per capita. Nor does the US stand out in terms of the quality of care: a recent study published in Health Affairs that compared quality of care across advanced countries found no US advantage. On the contrary, “the United States often stands out for inefficient care and errors and is an outlier on access/cost barriers.”

Obama’s Grand Bargain

Tuesday, February 3rd, 2009

From Obama’s Inaugural Address:

There are some who question the scale of our ambitions — who suggest that our system cannot tolerate too many big plans. Their memories are short. For they have forgotten what this country has already done; what free men and women can achieve when imagination is joined to common purpose, and necessity to courage.

What the cynics fail to understand is that the ground has shifted beneath them — that the stale political arguments that have consumed us for so long no longer apply. The question we ask today is not whether our government is too big or too small, but whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified. Where the answer is yes, we intend to move forward. Where the answer is no, programs will end. And those of us who manage the public’s dollars will be held to account — to spend wisely, reform bad habits, and do our business in the light of day — because only then can we restore the vital trust between a people and their government.

This brings to mind what George Stephanopoulos was so excited about last Sunday on This Week:

(Yes, I need to work on improving my DVR to computer quality.)

It seems that Obama is preparing to bet his presidency on a Grand Bargain – that will allow him (and us) to rewrite the social contract in a more extensive way than any president since Franklin Delano Roosevelt. Even during Obama’s campaign, he spoke of tackling the challenges that were necessary – and not putting off hard discussions about our country’s long-term stability. But the financial crisis – which at first prompted the endlessly parroted conventional wisdom that whoever won would need to cut all of their projects and focus narrowly on the crisis itself – has instead proved to be an opportunity.

The amount of spending needed to stimulate the economy is enormous – with the numbers being thrown around today dwarfing that of any previous government intervention (save perhaps for our major wars). What Obama understands is that this type of spending, while necessary in the short-term, poses a serious long-term threat. Which is why he is now speaking of the second step – after the financial crisis has passed – of tackling entitlement reform and tax reform, and finally putting America on sound financial footing after years of prolifigacy.

None of these insights are exceptional. What is exceptional is how Obama is already shaping the arch of his first term, using this crisis to set up his next objective, and shaping the conventional wisdom.

The problem I see though is that the Obama administration has not done a good job of conveying to the public the place this stimulus bill has within Obama’s agenda. The word is that in the next week or so, Tim Geithner will present “a ‘comprehensive’ plan that [he] hope[s] will command market confidence.” My hope is that this comprehensive plan will lay out a broad legislative agenda based on Obama’s campaign. Based on the campaign plans and signals sent during the transition, here’s what I see:

Step 1 (The First 100 Days)

  • Release the rest of the funds from TARP.
  • A large stimulus package to demonstrate the government’s commitment to addressing the crisis, especially in alleviating it’s effects on the majority of Americans.
  • A banking and mortgage bill that takes whatever steps are necessary to shore up these sectors of the economy, including new regulations, new oversight, and possibly additional funds.
  • An infrastructure bill that would create a National Infrastructure Bank.
  • Health care reforms that would extend health care benefits and attempt to control the escalating health care costs.
  • A combination of a cap-and-trade program and funding for green energy.

The goal of this first period would be to begin to make both short-term and long-term investments into those sectors that will lead to long-term growth – which will stimulate the economy in the short-term. This is the spending stage. After this burst of legislating, Obama would be able to focus on tinkering with education programs and seeing what works, as well as addressing the simmering foreign policy issues which are constantly threatening to take over the agenda.

Step 2 (Post-Crisis)

  • Entitlement reform (Social Security, Medicare, Medicaid.) Everything is on the table.
  • Tax reform. Not much has been said about this. This will certainly be a wild card – but Obama has criticized our corporate tax rate for its irrationality. It’s very high – but due to the enormous number of exemptions and credits, the effective rate for those businesses able to lobby for benefits, it is very low. This should be rationalized.
  • Universal health care.
  • Education reform.

This is the “cutting back” stage and consolidation stage. The goal of this second stage would be to put America on a solid financial footing again – to eliminate the unsustainable domestic policies that undermine our stability and power.

This is obviously an enormous agenda. And it’s far from clear that Obama can accomplish this. But if he does not lay out the vision – which I have pieced together from numerous statements – then it’s hard to see how he can accomplish it. Of course, Geithner was just confirmed last week – and Obama’s only been in office for two weeks – so he does have a bit more time to lay this out. But he doesn’t have long.

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