Posts Tagged Medicare
Why Does Anyone Still Take Paul Ryan Seriously?
His failed V.P. bid may have made him a national figure, but his budget plan is hopelessly out of touch.
March 16, 2013
Zipping across the land with a nice internet connection, so a good time to reflect a bit (looking down on clouds from above broadens the perspective a bit, I find).
So, I’m doing a radio interview last night, and moderately impressed with myself for being able to speak coherently about four different budgets: Ryan’s, Senate’s, POTUS (not out yet, but we can guess at the mix), and the CPC. Then I got asked a question which threw me a bit: why are Paul Ryan and his budget taken so seriously?
It wasn’t a snarky question. It’s just that I’d been discussing the absolute non-reality of his proposal—how the numbers don’t begin to add up, the unrealistic budget cuts, the plethora of magic asterisks in the absence of actual proposals (the most egregious of which is: I’ll cuts taxes by $6-7 trillion over the next decade and offset the revenue losses with…um…sorry, gotta run). And the interviewer was like, “OK…but if you’re right, why is his budget front page news such that he’s driving the debate?”
Here’s what I think is going on. First, institutional reasons. His party holds the majority and he’s the chair of the House Budget Committee. That in itself makes his budget newsworthy. Also, as a former VP candidate, he’s a national figure.
But that’s not the main reason.
I asked a wise, intently non-partisan friend who thought, and he admitted he was being generous, that one reason might be that Ryan’s introduced an important theme into the discussion: if you want really low taxes, you’ve got to give up Medicare as we know it.
But while that may be in there somewhere, it’s awfully muddled. It certainly wasn’t Ryan’s position in the election, where he and Mitt attacked the President for Medicare cuts. And his voucher program doesn’t start for ten years.
In other words, I think my friend is being too generous. I’ve argued that we actually need our politicians to articulate this point: if we want X, we’re going to have to pay for X. To my ears, Paul Ryan actually fits squarely in the problematic camp on this point, telling folks they can painlessly have it all. But in his version, it takes the form of trickle down: if we cut taxes on job creators, get rid of the safety net, and inject health care delivery with competition, then we can have it all for a fraction of what we’re paying now.
That’s very different that telling the electorate straight up that if we want what we say we want—social insurance, a strong safety net, productive public goods including education—we’re going to need to raise more revenues to pay for it.
So what is the answer? I think it’s twofold.
First, his views, positions, and rhetoric mesh very neatly with those of influential people, and those people have helped convince the media that Ryan is saying important things. One group of those people are, of course, the fix-the-debt-shrink-the-government-fell-the-pain coalition. Neither the numbers (the actual fiscal record or trajectory) nor the economics support their views, but they’ve been extremely effective in driving the debate.
The other group—and yes, there’s tons of overlap—are those who benefit most from tax reductions on the wealthy, and remember, many of these folks are professional investors. When they invest in Congress, they expect a big bang for their big bucks.
All pretty depressing so far, I know. But the second part of the answer is hopeful, and comes from the hoary old adage that you really can’t fool all the people all the time.
This may well be premature, but I believe Ryan’s popularity—his rep as someone who mustn’t be ignored—is fading and that this most recent budget will play a significant role in his decline.
My first clue was an interview he did with Larry Kudlow this week, and Larry’s on his side, especially on the supply-side stuff. But the tone of the interview was revealing, I thought. Kudlow expressed skepticism and disbelief that Ryan would be able to repeal Obamacare and thus didn’t think the budget stood up to even cursory scrutiny. And Ryan basically agreed! He spoke of his budget as symbolic and visionary, or some such stuff—I don’t remember the word salad. But he kind of just said he’s holding up a picture of one way of looking at things, a way that he and his caucus think makes sense.
But I think they’re increasingly isolated in this regard—certainly, the election outcome suggests that to be the case—and eventually, this will move the media away from him, especially as the fiscal numbers continue to move down to more normal levels. I could easily be wrong, of course, but I think that at the end of the day—and it’s getting toward dusk—enough people will no longer want to look at that picture he’s holding up, and as far as I can tell, he doesn’t have any other ones to show us.
- Why Does Anyone Still Take Paul Ryan Seriously? (rinf.com)
- Paul Ryan’s and Barack Obama’s Youth Problems (txwclp.org)
- Paul Ryan is offering more than a budget (conservativeread.com)
- Paul Ryan: ‘We’re not going to give up on destroying the health care system’ (dailykos.com)
- Why does anyone still take Paul Ryan seriously? (salon.com)
- VIDEO: Business News – Apple, Paul Ryan, Sy, Samsung (marketcurator.com)
- Jared Bernstein: Why Does Rep. Paul Ryan Get So Much Attention? (huffingtonpost.com)
- Unleash Paul Ryan! (aei-ideas.org)
- Paul Ryan doesn’t want to refight the past. Except for repealing Obamacare and ending Medicare. (dailykos.com)
- Paul Ryan’s Budget Would Destroy 2 Million Jobs: Report (huffingtonpost.com)
TEA PARTY AND THE RIGHT
The Sequester as a Tea Party Plot
Sequestration grew out of a strategy hatched soon after they took over the House in 2011.
Photo Credit: Rena Schild / Shutterstock.com
March 1, 2013
Imagine a plot to undermine the government of the United States, to destroy much of its capacity to do the public’s business, and to sow distrust among the population.
Imagine further that the plotters infiltrate Congress and state governments, reshape their districts to give them disproportionate influence in Washington, and use the media to spread big lies about the government.
Finally, imagine they not only paralyze the government but are on the verge of dismantling pieces of it.
Far-fetched? Perhaps. But take a look at what’s been happening in Washington and many state capitals since Tea Party fanatics gained effective control of the Republican Party, and you’d be forgiven if you see parallels.
Tea Party Republicans are crowing about the “sequestration” cuts beginning today (Friday). “This will be the first significant tea party victory in that we got what we set out to do in changing Washington,” says Rep. Tim Huelskamp (Kan.), a Tea Partier who was first elected in 2010.
Sequestration is only the start. What they set out to do was not simply change Washington but eviscerate the U.S. government — “drown it in the bathtub,” in the words of their guru Grover Norquist – slashing Social Security and Medicare, ending worker protections we’ve had since the 1930s, eroding civil rights and voting rights, terminating programs that have helped the poor for generations, and making it impossible for the government to invest in our future.
Sequestration grew out of a strategy hatched soon after they took over the House in 2011, to achieve their goals by holding hostage the full faith and credit of the United States – notwithstanding the Constitution’s instruction that the public debt of the United States “not be questioned.”
To avoid default on the public debt, the White House and House Republicans agreed to harsh and arbitrary “sequestered” spending cuts if they couldn’t come up with a more reasonable deal in the interim. But the Tea Partiers had no intention of agreeing to anything more reasonable. They knew the only way to dismember the federal government was through large spending cuts without tax increases.
Nor do they seem to mind the higher unemployment their strategy will almost certainly bring about. Sequestration combined with January’s fiscal cliff deal is expected to slow economic growth by 1.5 percentage points this year – dangerous for an economy now crawling at about 2 percent. It will be even worse if the Tea Partiers refuse to extend the government’s spending authority, which expires March 27.
A conspiracy theorist might think they welcome more joblessness because they want Americans to be even more fearful and angry. Tea Partiers use fear and anger in their war against the government – blaming the anemic recovery on government deficits and the government’s size, and selling a poisonous snake-oil of austerity economics and trickle-down economics as the remedy.
They likewise use the disruption and paralysis they’ve sown in Washington to persuade Americans government is necessarily dysfunctional, and politics inherently bad. Their continuing showdowns and standoffs are, in this sense, part of the plot.
What is the President’s response? He still wants a so-called “grand bargain” of “balanced” spending cuts (including cuts in the projected growth of Social Security and Medicare) combined with tax increases on the wealthy. So far, though, he has agreed to a gross imbalance — $1.5 trillion in cuts to Republicans’ $600 billion in tax increases on the rich.
The President apparently believes Republicans are serious about deficit reduction, when in fact the Tea Partiers now running the GOP are serious only about dismembering the government.
And he seems to accept that the budget deficit is the largest economic problem facing the nation, when in reality the largest problem is continuing high unemployment (some 20 million Americans unemployed or under-employed), declining real wages, and widening inequality. Deficit reduction now or in the near-term will only make these worse.
Besides, the deficit is now down to about 5 percent of GDP – where it was when Bill Clinton took office. It is projected to mushroom in later years mainly because healthcare costs are expected to rise faster than the economy is expected to grow, and the American population is aging. These trends have little or nothing to do with government programs. In fact, Medicare is far more efficient than private health insurance.
I suggest the President forget about a “grand bargain.” In fact, he should stop talking about the budget deficit and start talking about jobs and wages, and widening inequality – as he did in the campaign. And he should give up all hope of making a deal with the Tea Partiers who now run the Republican Party.
Instead, the President should let the public see the Tea Partiers for who they are — a small, radical minority intent on dismantling the government of the United States. As long as they are allowed to dictate the terms of public debate they will continue to hold the rest of us hostage to their extremism.
- Robert Reich: The Sequester and the Tea Party Plot (huffingtonpost.com)
- The Sequester and the Tea Party Plot (readersupportednews.org)
- The Sequester and the Tea Party Plot (obrag.org)
- The Tea Party Plot (robertreich.org)
- The Sequester And The Tea Party Plot – OpEd (eurasiareview.com)
- Robert Reich: None Dare Call it Treason (politicalcrazyness.tumblr.com)
- The Sequester as a Tea Party Plot (alternet.org)
- The Sequester And The Tea Party Plot – OpEd (albanytribune.com)
- Sequestration, Tea Party conspiracy? (salon.com)
- The sequester and the Tea Party Plot (blogs.berkeley.edu)
GOP Movement on Taxes Still Leaves Huge Budget Quandary
In a sign of movement toward resolving the fiscal cliff, House Republicans have begun to budge on their no-new-tax stance. In a development first broken by Politico, Speaker John Boehner privately to raise taxes on household income above $1 million.
This is not even close to President Obama’s campaign pitch of raising taxes on wealthy families who earn more than $250,000, but it’s a start to the beginning of a serious negotiation. And, the more revenue that Boehner puts on the table, the more open to entitlement cuts the administration will be, say sources close to the White House.
The only problem with the $1 million threshold is that it doesn’t clue Americans in on some long-term budget realities. Over the next decade, the deficit will unless the federal government gets a better handle on the amount of money it brings in, as well as the cost of its entitlement programs, including Medicare.
The federal government has promised to provide health insurance and Social Security payments for all of the baby boomers—and that’s a fiscal problem as well as a demographic one. Already, this is going to cause a huge spike in the cost of the entitlement programs in the coming years because a much greater share of people will sign up for the programs (at a time when healthcare costs continue to rise and when Americans pay a historically low level of federal taxes).
So, we’ve committed to spending tons of money just as we’re not bringing in enough cash to pay the bills. Moving the tax threshold to $1 million does not help that issue. Taxing household income above $1 million is estimated to bring in $463 billion over 10 years, whereas taxing rich families above the $250,000 threshold rakes in $829 billion, according to by the left-leaning Center on Budget and Policy Priorities. That’s a big difference.
But, the most significant problem with the $1 million mark is that politically it creates a false sense that we’ve solved the budget problem by raising taxes on the uber-rich. Not even close. If Americans want to keep the programs everyone seems to enjoy (and not drastically change the make-up of the federal government by cutting agencies, medical research, or education, as the Ryan budget proposes), then a greater share of people are going to have to pay more in taxes—and that inevitably will include families who earn more than $250,000 but also probably families that make over $100,000 a year. That’s because the bulk of the money in the tax code comes from households making between $100,000 and $200,000.
Setting the standard of only taxing millionaires lets politicians off the hook–both Democrats and Republicans. It doesn’t give Americans the larger, genuine picture about the long-term budget quandaries. It’s just a fabulous political slogan. After all, who is going to oppose asking people with incomes above $1 million to pay more?
- Sources: Boehner Caves On Taxes For Wealthiest Americans (huffingtonpost.com)
- AP source: Boehner offers millionaire tax hike (kansascity.com)
- Boehner proposes raising taxes on millionaires (cbsnews.com)
- Boehner Puts Tax Rate Increases On The Table (outsidethebeltway.com)
- AP source: Boehner offers millionaire tax hike (washingtontimes.com)
- AP source: Boehner offers millionaire tax hike (cnsnews.com)
- Movement Seen in ‘Fiscal Cliff’ Talks (aarp.org)
- Boehner pitches millionaire tax hike (politico.com)
- John Boehner Offers Millionaire Tax Hike (alan.com)
- Speaker John Boehner to propose tax hike on the very rich, Politico says (rawstory.com)
3 Things You Have to Know About the Bogus ‘Fiscal Cliff’
Is it the economic equivalent of Superstorm Sandy? That depends on what we do.
November 23, 2012
Photo Credit: Shutterstock.com
Obama won. Romney lost. That is a crisis averted and a very good thing.
But the contest is hardly over. The election was essentially an intermission in a long drama over economics. What’s going to happen in the upcoming act? A sharp change? Muddled compromise? A new stalemate?
According to the coming attractions, the episode up next is a really big action scene: The Fiscal Cliff!
Here’s the action. Three vehicles, plus some scooters along for the trip, are all racing straight toward a cliff! They have no brakes! If any of them go over the edge – according to promotional videos on the action news – it will hurt the whole economy, slow our growth and plunge us into a new recession. If they all go over together, it will be really, really, super-bad.
The biggest one — visualize it as Tony Soprano’s Cadillac Escalade — is the expiration of the Bush tax cuts.
Vehicle number two has less than half the weight. It’s the expiration of Obama’s Social Security tax cut, an everyman’s sort of car, call it a Ford Taurus.
The third is a pick-up truck. A simple one, a bit smaller than the Taurus. But! What you gotta worry about is the payload in the back! Tanks of propane! If this baby hits the ground it blows up in everybody’s face. Especially the face of your local congressperson.
The bomb is sequestration. That’s a misappropriated term, but in this case, it means that the failure to reach a deficit cutting deal launches an instant spending cut of approximately $100 billion. Like the Queen of Hearts in Alice in Wonderland, shrieking “off with their heads,” it lops 8 percent off the top of all discretionary spending. Discretionary spending is the money we spend inspecting food, testing drugs, running federal courts, running the FBI, DEA and the Border Patrol, supporting education, doing research, maintaining national parks, keeping airplanes from colliding, and collecting taxes. Roughly 9 percent will also be cut from military spending.
These cuts will not be done surgically. No thought, planning, care, or precision will go into the process. It will be done Grim Reaper-style, swing the scythe and slash everything in the way.
Those are the big three. The other financial events on the same schedule include the Affordable Care Act, aka Obamacare, which can be regarded as a new tax, “other” tax provisions that come to an end, the unemployment benefits extension ends, and the rates Medicare pay will go down.
Should we be afraid, very afraid? Is it the economic equivalent of Superstorm Sandy? The answer is: maybe. It depends on what we do.
Let’s take them one at a time.
What if the Bush tax cuts expire? Say “Thank you, Jesus.” Put any spare cash you have in the stock market.
There was a stockmarket crash in 1987 (Black Monday), followed by widespread bank failures (Savings & Loan Crisis), and a recession. That recession ended after tax hikes, first from George H.W. Bush (the Elder), and then from Bill Clinton.
You have constantly heard, and will continue to hear, that tax cuts stimulate the economy. It’s not true. All major tax cuts in the last 100 years, have led to the same cycle – bubble, crash, recession – usually with bank failures.
This cycle — bubble, crash, bank failures, severe recession — began with the Bush tax cuts. Recovery has been slow and sluggish. It has also primarily benefited large corporations (record profits) and the rich. It has not helped ordinary people very much. Want to get that recovery cracking and make it work for everyone? Raise taxes on the rich.
Don’t even think of the end of the Bush tax credits as a crash. Or a fall off a cliff. Or anything bad at all. Think of it as letting go of a burden that has distorted everything it touched. Once we are released, we can float quickly, but gently, upward, returning to the (relatively) glorious economic conditions of the Clinton years.
Let’s look at the Ford Taurus, the cut in social security taxes.
There were two ideas behind the cut.
One is the weird semi-mystical belief among economists, including the economists who advised Obama, that tax cuts create growth. It is based on the idea that the market economy is the “real” economy. All economic good – growth, jobs, wealth – is presumed to be produced by that “real” economy. In this vision, taxes take money out of the “real” economy. That money then disappears. Therefore the whole economy is smaller. So it is sad and it grows more slowly.
However, according to the hymns sung in the church of economic orthodoxy, if you cut taxes, you put more money in the hands of consumers, they spend, they spend wisely (their decisions are necessarily smarter than any damn bureaucrats’ up in Washington). Since somebody must be making the goods and services they purchase, the result is growth and increased employment.
What if the government spends the tax money on roads and research on alternative energies? On cops, teachers and bridge inspectors? Those are very much part of our economic reality. That creates jobs.
What if the consumers spend their tax rebates paying off their credit card interest, on Chinese goods, and recreational Oxycontin? Those are all quite likely choices.
As an economic stimulus, the Social Security cuts are probably, sort of, moderately all right. Though they are not nearly as good as direct spending on building, fixing and maintaining infrastructure would have been, spending that largely stayed in America, created jobs that paid better than retail, and represented an investment.
Presumably the other reason for the Obama tax cuts was strictly political. Along the lines of, “Hey, people like tax cuts, so I’ll give them tax cuts. Bush’s tax cuts went to rich people, I’ll give mine to middle-income people. See, I do tax cuts, too, but mine are better.”
Though it didn’t really work for Obama. He never sold his tax cuts with that Republican verve.
It’s still their brand. Not his.
The bad part about Obama’s tax cuts is political. They weaken Social Security. For the most part, people who receive Social Security invested in it. Just as much as people who invest in 401(k)s, SEPPs, IRAs, or who get pensions. Let me put it this way, “Goddamn it, I paid in my whole life. From jobs I worked at. From things I made. It’s no friggin’ entitlement, I earned it. Just like my Medicare. They are earned benefits.”
Until Obama, the system had been sacrosanct. If contributions are cut, money to replace it must come from somewhere other revenue. That begins to transform Social Security into an actual entitlement program, which is bad because it diminished Social Security’s almost unique moral standing.
So, if the Taurus goes over the edge, well, what the hell, it was a rental anyway. Time to get back to our real car, the one that we own.
Letting the Escalade crash is actually a good thing for the economy.
It’s the pick-up truck, with the propane canisters, that’s the one that people are right to get hysterical about. Spending cuts will hurt the economy.
All Republicans have (or at least declare) an intensely fervent faith in their Four Pillars of Failed Wisdom. The first two are that higher taxes hurt the economy and taxes cuts create growth. It’s hard to understand how anyone who has witnessed the last 12 years can possibly still believe that. Growth with Clinton’s tax hikes. Recession, then bubble, crash, bank failures, and recession with Bush’s tax cuts. The limp response to the continuation of the Bush cuts, Obama’s first round of cuts (the “stimulus” package was about one third tax cuts), and his second round (Social Security).
The other two pillars are that government spending hurts the economy, while cuts in government spending create growth.
Here’s one simple fact to look at: Unemployment.
In the last few years there have been massive cuts in public sector employment. Many people will say that it was a necessary response to economic conditions. But in previous recessions and depressions, we increased public sector jobs. For example, the only job growth in Bush’s first term was from government employment. The public sector job cuts in this cycle were driven by ideology and by politics, not by economics.
If we restored public sector jobs to where they were in 2008, the unemployment rate would be 7.1 percent.
If we cut government spending we destroy jobs. Both direct public sector jobs and private sector jobs created by government contracts. You may or may not like many of the things that government pays for, like making bombs and building bombers, but those programs do employ a lot of people.
But what about the deficit?
Shouldn’t we be hysterically worried about the deficit? There’s a constant chorus, “I don’t want to leave this mess to my grandkids.” You see it on blogs, “…. our country is literally mortgaging our children’s future.”
You hear it from politicians, “We continue to increase the financial burden our grandchildren will have to bear … “
On TV commercials, “I don’t want my grandchildren and great grandchildren hopelessly in debt …”
On talk radio and talk TV, “Under Obama, $5.3 trillion has been ruthlessly stolen from our children and our grandchildren.”
In newspapers, and in the halls of congress, “Debt … grandchildren … deficit … grandchildren.”
Here’s a big clue that the deficit problem is not exactly as horrid as it’s painted. After they whine about grandchildren and debts, I have never heard a single one these people say, “Therefore, let’s pay for things now. Come on people, if we don’t want debts, let’s dig a little deeper.” Which is what you do if you actually care.
That does not mean that deficits, like debts of any kind, can’t be a problem. They can be.
The mistake is to talk about deficits as if we were talking about our personal family budgets, what we owe on our credit cards, car loans, and mortgages. Most people who have regulars have a fairly fixed income. Even if they get raises, they’re within a narrow range. If debts get too high, there’s no way to pay them off. If income goes down, or it stops, even for a brief period, those debts become very serious problems.
But a government isn’t a salaried employee. Or someone working for wages.
Government borrowing, debts and deficits should be thought about as similar to business borrowing and corporate debt. Businesses usually get started with borrowed money. If they’re slow in getting to where they can pay the loans back, they’ll often borrow more. Once they are on schedule to pay off those loans, they may borrow for further growth. Meantime, they will have a separate credit line to cover the time gap between expenses and collections. With some rare exceptions (like a very profitable company in a shrinking economy), businesses are in a constant state of debt.
We do not judge companies by the size of their debt. We judge them by what the debt is for. If they have borrowed for an expansion or for a new venture that is likely to pay off, that debt is fine. If they have borrowed for something that will never pay … to build buggies in the expectation that this automobile thing is a passing fad … then no matter how small their debt is, it’s a problem.
A government’s business is the entire national economy. The goal of government, then, is to increase the pool of taxpayers and to increase their ability to pay. If a government borrows in order to spend in ways that will grow that economy, that’s fine. Provided that said growth will be sufficient to pay off the loans that created the growth. Just like with a business.
If there is an economic crisis, and the government borrows to save banks from collapsing (though they may not deserve that rescue as a moral proposition), to keep major industries alive (hopefully so they will then function successfully on their own), to employ people (so there is a base of customers for all businesses to sell to), to create, maintain and improve infrastructure (a sound investment because it becomes an invisible subsidy to all businesses), that is a sound investment. It will pay off because it makes the downturn shorter and the upswing stronger.
There’s your scorecard. At least for the main events.
If Tony Soprano’s Escalade goes over the cliff, carrying George Bush’s tax cuts, and bursts into flames in the best Hollywood stunt tradition, give a cheer.
If Obama’s Social Security tax cuts get dropped, it will cost you a bit more, but you can feel better about the integrity of the system. Which is important.
If the abrupt and arbitrary spending cuts go into effect, that’s bad. Seriously bad. It wipes out jobs. It hurts people. It slows the economy. It’s a replay of 1937.
More important than knowing when to applaud or to cry, these are the positions you should be pressuring your senators and representatives to take. What you should be writing letters to the editor about. Calling in on talk radio. Raising your voices, any way you can. We are not just spectators. We’re players inside this drama.
- 6 Reasons the Fiscal Cliff is a Scam | Alternet (mbcalyn.com)
- 3 Things You Have to Know About the Bogus ‘Fiscal Cliff’ (alternet.org)
- 6 Reasons the Fiscal Cliff is a Scam | Alternet (johnny99america.wordpress.com)
- Taking it to the President on the Fiscal Cliff (cornhusker4palin.newsvine.com)
- Sen. Lindsey Graham: ‘We’re Going Over The Cliff’ (huffingtonpost.com)
- Could the fiscal cliff kill the economy? (finance.yahoo.com)
- Geithner: Republicans Will Agree To Tax Hikes On Super Rich (huffingtonpost.com)
- What is The Fiscal Cliff? Is it The End of The American Economy? (zazenlife.com)
- Fiscal-Cliff Negotiations (nationalreview.com)
- Geithner urges Republican leaders to offer ideas on averting fiscal cliff (nbcpolitics.nbcnews.com)