A Half-Trillion Dollar Delusion

From my latest Washington Times column

:

After a three-month delay, the trustees of the Social Security and Medicare trust funds have finally published their annual report. Now we have an explanation for the wait. Thanks to program changes made by the Affordable Care Act (aka Obamacare), the report summary says, “The outlook for Medicare has improved substantially.”

The Hospital Insurance Trust Fund, expected only last year to run out of money in 2017, is now expected to remain solvent until 2029, says the report. What is responsible for this 12-year lease on life? Another document, released by the Center for Medicare and Medicaid Services earlier this week, fills in the details: Reforms to the health care delivery system will shave government spending by $575 billion over the next 10 years, and trillions of dollars more in the following decades. To use the jargon of the health care wonks, Obamacare will “bend the cost curve down” – from 6.8 percent annual increases in Medicare spending, as projected previously, to a more fiscally sustainable 5.3 percent.

In Obamaworld, those gains will not come from health care rationing, as Republicans fear, but by transforming the health care system from a fee-for-service model that encourages wasteful spending into a system that rewards hospitals and doctors for economic efficiency and improved quality.

Alas, the Obama administration is living in never-never land. The positive components of Obamacare – and there are several – may have a beneficial effect, but they will be swamped by the bureaucratic nature of the legislation. The Medicare budget deficit will turn out far worse than the Obama team imagines. Read more.

Update: In retrospect, I realize that I don’t make the argument in the Times column as strongly as I could have. I spent too much space articulating the Obama administration’s thinking behind Obamacare (bending over backwards to be fair and balanced), and not enough space to explaining how the legislation actually undermines the intent. As I explained in my Boomergeddon blog post, “Where Are the Health Entrepreneurs?” (warning, none of this will make much sense until you finish reading the Times column):

There is one critical element that Cutler, a key architect of Obamacare, left out: The number one reason there is so little innovation in new health care delivery systems is that the key established players in the system — hospitals, insurers and doctors — have utilized their political power to entrench their positions in the medical marketplace and ward off competition. For all practical purposes, independent entrepreneurs are prevented from devising new models for delivering health care.

That’s why Obamacare is not the answer. Although the Affordable Care Act does set up mechanisms to fill the information void on medical outcomes, and it aims to change the incentives to reward efficiency, rather than punish it as the current fee-for-service system does, it also protects the big insurers and hospitals against competition from entrepreneurs, and it does nothing — indeed, in practice, it discourages — patient/consumers from taking more ownership of their health care purchases.


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56 responses to “A Half-Trillion Dollar Delusion”

  1. Larry G Avatar

    " That’s why Obamacare is not the answer. Although the Affordable Care Act does set up mechanisms to fill the information void on medical outcomes, and it aims to change the incentives to reward efficiency, rather than punish it as the current fee-for-service system does, it also protects the big insurers and hospitals against competition from entrepreneurs, and it does nothing — indeed, in practice, it discourages — patient/consumers from taking more ownership of their health care purchases."

    Fair criticism.

    I have no doubt that major changes will have to be made to Obamacare just as major changes had to be made to Medicare and even Social Security.

    The problem I have is that the do-nothing Republicans COULD HAVE DONE IT RIGHT – including correcting these flaws and instead the Republicans did nothing for 8 years and then spend the next year and half in a jihad to stop and or cripple this effort.

    They had 8 years to put together … in nothing else – a START towards reform instead of more empty promises like repeal and replace.

    The folks who criticize Obama_Care .. have a much more righteous is they spent the previous 8 years berating the Republicans for doing nothing about health care.

    But you have no standing at all in my eyes if you waited until now to espouse your "concern".

    only a step or two shy of hypocrisy.

    Even now.. the criticism is not point to what needs to be done to change Obamacare to point it in a better direction.

    Nope. The criticism is pointed squarely at doing away with it altogether … and starting over.

    Do I have confidence in this kind of approach or the people who thought health care never needed any reform to start with?

    NOPE!

    Change is not "clean".

    Change is pretty messy.

    Change is as hard as those opposed to it want to make it.

    repeal and replace?

    ha ha ha ha ha ha

    repeal – maybe …

    replace? – ha ha ha ha

    the anti-Obama_care folks do not have a clue what to do – except carp.

    ….and I grant you.. they're good at that….

    give them credit….

  2. Larry G Avatar

    You know –

    the vast majority of economists have said that our health care system is not sustainable.

    That paying twice as much for health care as the rest of the industrialized world will lead to too much of our economy consumed by health care expenditures and that our entitlement systems will lead to unsustainable deficits.

    And they said this when?

    They said this during Bill Clinton's term.

    and Hillary_Care (remember that phrase) was deemed so wrong that it was considered a threat to the American way of life.

    In case you haven't noticed, I have nothing but derision for those who shut Hillary down and not only spent the next 8 years giving tax cuts while adding to the deficit – rather than cutting it… two wars on the credit card…

    AND ZILCH on Health care.

    Now that's bad… I think even Jim Bacon will agree that it was and is.

    But what is worse?

    Worse is this.

    That Obama_Care is bad, bad, bad…

    and the solution is

    TA DA – put the same do-nothing Republicans back in office.

    Now I have to ask those who simply hate Obama_Care…

    and the numbers if not legion are impressive…

    this simple question….

    do you REALLY THINK that these Republicans will do anything other than what they were doing before?

    Is the truth – that this kind of change is so bad – that ya'll would be happier with a do-nothing Republican government?

    That's all I can get out of this…

    can someone tell me what the Republican Plan forward is?

  3. James A. Bacon Avatar
    James A. Bacon

    Larry, For the record, I'm not defending the Republican track record on health care policy. Most GOP proposals for fixing the health care system are cosmetic. (Read "Boomergeddon" and see my take on tort reform.) Republicans have yet to articulate a rationale for a market-driven health care system. That's why I'm an independent, not a Republican.

    Republicans have yet to articulate a market-driven approach to energy policy either. GOP leaders in Washington have co-opted by the political class.

    In the GOP's defense, however, I would suggest that Republicans would be less hostile to the idea of a market-driven health care system than the Dems, who secretly, deep down inside want national health care. In that regard, The Rs are the least of two evils.

    But that's not much of an endorsement.

  4. Gooze Views Avatar
    Gooze Views

    Jim,
    You trot out these anti-Obama arguments and when people like Larry Gross correctly bring up that the GOP DID NOTHING for years on same, you simply toss that off by saying, "Oh, I am critical of Republicans, too, I go after them for tort reforkm in my book…"

    You are getting off a little too easy here, Jimbo. Why don't you show us some evidence of your views on the Republican approach and maybe suggest some kind of bi-partisan convergence.

    That's the trouble with you conservatives/libertarians. As Austrian economist Friedrich Hayek once said, conservatism maybe a good framework for criticism but as far as setting national policy, forget it.

    Peter Galuszka

  5. Larry G Avatar

    what the … "Dems are closet socialists, the Republicans are not" approach is

    a failure.

    it's one thing to castigate the Dems for their socialistic tendencies but if your alternative approach is nothing

    and you support that approach from the Republicans – then you're essentially supporting the status quo – kick the can down the road and watch our current health care system literally drive us into an economic ditch – permanently.

    This is not a solution.

    Putting the Republicans back in office even as you claim to be an independent – is not a solution.

    I'm for solutions.

    If you don't like the Dems solutions then man up

    and no.. tort reform is not going to fix this problem…

    it's yet another diversionary canard .. that is being used to say " you do tort reform or no deal".

    That's not working towards solutions.

    That's drawing lines in the sand – excuses – wedge issues – not solutions.

    Supporting the Republicans even as you claim that you don't is what you are in fact doing.

    And by doing that – you're giving the Republicans free rein once again – to do absolutely nothing …

    why not tell the Republicans that unless and until they come up with a plan?

    why just usher them into office to do more of what they did before?

  6. Anonymous Avatar
    Anonymous

    Guys, the days of Blame Bush are over. Obama is the president. He's served more than one-third of his term. I will agree that the GOP, during the four years it held the White House and both houses of Congress did nothing substantive to reform health care.

    But you know what? The average person doesn't care. Did the voters in Missouri care? It's President Obama. He's the duly elected leader of the U.S. He got his HCR through Congress.

    There is a strong incentive for employers to drop health care coverage for retirees. I worked for a company that provides health care for its retirees. I have quite a few business friends, who are retired and are receiving health care from my former employer. They see HCR as taking away what was part of the employment contract. And they blame Obama. They don't care what Bush did or did not do.

    Taxes are going to sky-rocket under Obamacare, while most people with health care coverage will see no improvement in benefits. Obama and Congress created a plan that creates economic losers. These people vote and are angry. They don't care what Bush did or did not do. They care about the current administration and Congress.

    Ray may like HCR because he is a relative winner. He doesn't have something and will get some, albeit at a cost. But the emails I get from my former co-workers have at least 35 people on the distribution list. Creating large numbers of people who believe they will lose is not a recipe for political success. Layer in the Recovery Act mess, protecting Freddie and Fannie; immigration amnesty, the possible huge federal tax increases coming, the Congressional scandals after Pelosi promised the most ethical Congress ever, and this is why Missouri happened.

    This is not a permanent pass for the GOP. If they take the House, they need to say "no" to the big business interests and fans of spending. But right now, an awful lot of people think Obama has poked them in the eyes a couple of times.

    TMT

  7. Larry G Avatar

    re: Blame Bush? No… nothing to do with him at all…

    re: people don't care?

    people don't care about the deficit that the economists say will destroy our economy if we don't reform health care?

    re: " Taxes are going to sky-rocket under Obamacare,"

    then where is the plan that will keep health care from destroying our economy?

    do you forget that every product we make has those embedded health care costs in it and it makes our products uncompetitive in the world markets?

    re: " This is not a permanent pass for the GOP."

    be truthful.

    all you want the Republicans to do is put us back where we were when they were in office before with no more of an agenda for fixing health care than they had then.

    Do you REALLY EXPECT the Republicans to take on big business on ANY ISSUE?

    that's a joke TMT…

    all you're voting for is to put us back where we were 8 years ago and that's untenable.

    Hiding the closet won't work.

    that's what voting for the Republicans basically is….

    the strategy is:

    "ignore the problem and maybe it will go away… especially if we have tort reform".

    is this really a viable option?

    the Republicans could steal the Deficit Commissions thunder right now by telling the American people the truth about what must happen.

    That we must raise the FICA tax on Medicare or repeal Medicare.

    That we must push the retirement age for SS and Medicare to 70 – in phases.

    That we must stop fighting wars on the credit card.

    That tax cuts don't really work and are indeed voodoo economics.

    some or all of the above – principled people must assert whether we call them Independents, Republicans or Democrats.

    Voting the Republicans into office who won't say this is not a solution.

    supporting Republicans as the less of two evils is not a solution either.

  8. Anonymous Avatar
    Anonymous

    Larry, except around the edges, where did Obama reform health care? I think electronic medical records has the potential to make some real improvements. But where are the other reforms? HCR was all about expanding coverage to people who would tend to vote for Democrats. In fairness, leaving the status quo would probably benefit people who are more likely to vote Republican.

    Obama is not about fixing things. He's about moving income to people who support him. Much of the Recovery Act funds went to public employees and non-profits. Broadband money has been given to nonprofits who could no more build and operate a network than a third grade class.

    Fannie and Freddie were excluded from financial services reform. Obama is calling for another immigration amnesty. Who will pay the added costs? Another income transfer.

    I agree with you that retirement age needs to be raised. People live longer and are healthier. Phase it in. Let's hit 70 over a period of time. Public sector employees need to move to defined contribution plans. That too can be phased in. I don't know whether the GOP would do those things. I do know most, but certainly not all, Democrats won't. Maybe we need the Tea Party.

    TMT

  9. Larry G Avatar

    re: " except around the edges, where did Obama reform health care?"

    if that is all he did what's the big repeal & replace ruckus about then?

    Can you say he did nothing at the same time you claim that it's going to be the biggest tax increase in history?

    which is it?

    " Obama is not about fixing things. "

    SO, he does one of the biggest financial reforms since the FDIC and instead of getting credit for what he did accomplish he gets blame for what he did not.

    He is current deporting more illegal immigrants than any of his predecessors and 4 times as many employer checks, has spent more money, put more border guards and more fence and drones, etc than any of his predecessors but the word is that he is pandering for Hispanic votes.

    He forced the unions at GM to make major concessions in the bail out – but again, he's about transferring wealth and trying to get union votes.

    He's fully behind the efforts to fire teachers and hold their accountable in DC and other places – more than his predecessors would have ever dared to think.. and the word is that he being overly solicitous of the unions.

    He's stuck it out in Afghanistan and put more troops in that Bush did and is pushing the envelope on trying to find a solution behind the neocon idiocy of nation-building.

    and he did this in 18 months and who is to say, he is done yet with Fannie & Freddie but you guys… 18 months.. and he's done… (no 8 years or him, heck not even 4 – after 18, he's done).

    you guys are full of bullfeathers.

    It's pretty nutty how you guys have the facts in front of you and you and you refuse to admit it and it's even funnier when on most of these issues he's done more than George Bush and his Republicans ever thought about doing …

    and your remedy is to vote them back in.

    ya'll only talk about what you don't like about Obama and the things you say he should be doing, your guys did not do… and your solution here is to vote the same bunch back in.

    and that's the agenda…the whole agenda and nothing but the agenda…

  10. Gooze Views Avatar
    Gooze Views

    TMT
    The days of Blame Bush may be over to some, but we certainly are having to deal with the result. Consider:

    (1) We haven't really paid the bill yet ($3 trillion?) for two wars including one that was totally unncessary and was based on faulty intelligence.

    (2) We are living with the aftermath of the tax cuts for the rich.

    (3) We are still struggling with jobs and economic growth after the Bushies either loosened regulations (such as allowing greater debt to equity ratios in lending) or did nothing when it was needed (hedge funds, CDOs, CDSs, etc.)

    While it may be politically bad form to blame Bush, we still feel his effects every day.

    Peter Galuszka

  11. Larry G Avatar

    For myself, I'm over Bush like I am over a particularly ugly belch a few weeks back.. not a memorable moment.

    And despite those who might think so – I am no dyed-in-the-wool supporter of Obama nor the Democratic Party and for that matter any tax & spend types

    but I am even less of a fan of the tax-cut and spend crowd which totally defines not only Bush but more importantly – the Republican Party who cynically promoted the "Contract for American" and "Family Values".

    Just how responsible is it to CUT TAXES and then run two wars OFF BUDGET .. do NOTHING about entitlements which is 2/3 of the deficit and the looming Boomergeddon of the century

    then when things go to hell in a handbasket – assume a "What, Me Worry" attitude about it?

    Now.

    Those who say they are independents but want Obama out are basically saying – put the same Republicans back in.

    Notice, we're NOT TALKING about BUSH here.

    We're over him.

    We're talking about the same guys who pushed for tax cuts and wanted two wars and were telling the American people that the tax cuts would pay for the wars.

    these are the guys that you independents want to put back in charge of the government.

    please explain yourselves.

  12. Darrell -- Chesapeake Avatar
    Darrell — Chesapeake

    Costs rising, business and individual gaming, doctors bailing, and insurance companies ready to stop coverage. The real Obamacare?

    http://www.darkdaily.com/battles-in-massachusetts-over-rising-cost-of-health-insurance-premiums-804

  13. Anonymous Avatar
    Anonymous

    Peter, I'll not argue wars. But I will argue taxes. IRS data show that higher income people paid a higher percentage of taxes with the Bush tax cuts. "In 2007, the top 1 percent of tax returns paid 40.4 percent of all federal individual income taxes and earned 22.8 percent of adjusted gross income. Both of those figures—share of income and share of taxes paid—are significantly higher than they were in 2004 when the top 1 percent earned 19 percent of adjusted gross income (AGI) and paid 36.9 percent of federal individual income taxes." http://www.taxfoundation.org/news/show/250.html

    Fred Hiatt is wrong, as always. Lower rates on a broader base generate more tax revenue. And I'm far from being in the top 1%. Here's a citation from 2010. http://www.bloomberg.com/news/2010-08-05/squeezing-the-rich-is-poor-way-to-spur-growth-commentary-by-caroline-baum.html

    One of the biggest financial problems stemmed from the failure to regulate Freddie and Fannie and deep in the middle of that is Barney Frank (D-Mass). And there still is no regulation of Freddie and Fannie. That was excluded from the latest legislation. I believe the law is called the Frank-Dodd bill.

    The problem with America is not that we're taxed too little, but filthy Congress spends too much. Require a 60% majority to pass a budget. Then we can clean out all of the spending idiots.

    Obama is doing a terrible job as president. He's worse than Jimmy Carter — and I even voted for Carter — once. Look at the Missouri vote. Missouri, while voting narrowly for McCain, replaced a GOP senator with a Democratic one and elected a Democratic Governor to succeed a Republican one. Yet, they voted against HCR by 40%. That says a lot.

    TMT

  14. Accurate Avatar

    Larry (and Peter for what little its worth) –

    My biggest problem with Obama and the democrats is that they don't listen. When they held townhalls on Obamacare the people, the common people told them loud and clear that the plan that they came up with stinks. It's great to talk about a plan, it's better to come up with one. But the arrogance that the democrats display (constantly) is beyond annoying. Please don't hit me with the objectors at the townhall meetings were plants, for every so-called plant there were 20 or more real people who didn't like what they saw, read and heard about the plan. When you have government officials who are suppose to represent you and me saying things like, "But we have to pass the bill so that you can find out what is in it…", then it's time to stop this train so we can get it back on the proper track. When there are backroom deals like the 'Louisiana purchase' and the 'Cornhusker Kickback' (Nebraska); Montana, North Dakota and South Dakota all have 'special deals' cut to pass the bill – then there is something terribly wrong with both the bill and the way that it made it's way through congress.

    When legislation is (now) routinely upwards of 2000 pages long, there is probably a problem lurking somewhere in that legislation. When bills are run through the legislative process because 'it has to be done right now', there is probably a problem in that legislation.

    To me, the ONLY thing that Obama has done right in 18 months was the standing order to kill the pirates if the hostage lives were in danger during the takeover of the cargo ship by the pirates. THAT was doing the right thing. THAT was as close to leadership as this president has gotten. I'll tear Larry's arguments up in the next posting.

  15. Larry G Avatar

    I'll actually agree with Accurate's analysis of the "arrogance" of Obama and his people if Accurate will agree to the "arrogance" of the prior 8 years of having tax cuts at the same time they increased spending then passing a subsidized drug program when they say they are the party that claimed that "paygo" should be the law of the land.

    and about "process" – will you admit that Tom Delay holding open the vote until the wee hours of the morning while he threatened retribution to the Republicans that did not fall in line was about the same of the "corn husker" etc, et al?

    The health care system is not going to be fixed by nibbling around the edges.

    I give the Clintons credit for realizing it and I give Obama credit for also recognizing it and also realizing that the Republicans had no intention of addressing it

    … despite the fact that the CBO for more than a decade has identified it as a clear and present danger to our economy and our way of life – that is is unsustainable and by not addressing it we are headed for Jim Bacon's Boomergeddon not to mention passing the crushing debt on to the "kids".

    such hypocrisy I have never seen.

    The Republicans are your basic cowards who talk the talk when it comes to fiscal responsibility an then bail out when the truth has to be told to the American people – that their current health care plans are not going to survive except for those who have secure jobs an high incomes …

    As far as 2000-page legislation is concerned – how about this.

    BEFORE someone says that it's an example of bad legislation… find out how many pages, the Patriot Act or Medicare Part D or even the defense appropriation act is and THEN when you have CLEAR PROOF – make that accusation?

    How about doing that?

    as far as the only thing that Obama has done right… perhaps.. clearly a matter of opinion but tell me this Accurate

    what exactly did Bush and the Republicans do right in their 8 years AFTER 911?

    I love it when people blame Barney Smith who was a SINGLE MINORITY congressman – as the reason why Bush and the Republican Congress were UNABLE to rein in Fannie/Freddie.

    WTF?

    Who should I believe when I'm told that a Republican controlled House and Senate and a Republican President – the same ones who passed the Patriot Act, Medicare Part D, repealed PAYGO and stood by why the economy went belly up…

    that a lone congressman is the reason they were unable to rein in Fannie/Freddie.

    What kind of people think like this?

    Certainly not those connected to the real world, IMHO.

  16. Accurate Avatar

    Larry, let's talk –

    You want him to get credit for the financial reform bill. Do you know what's in it? Did you know that under the bill, large, government-favored firms will continue to operate with an explicit government backstop whether through emergency loans, federally-insured debt, or the FDIC’s expanded authority to rescue their creditors if things get rough. His bill created a new consumer protection bureau. Did you know that this new bureau now has unlimited regulatory authority over the kinds of credit and investment vehicles that consumers and businesses can utilize – which ultimately will mean fewer choices, which typically means more expensive choices. And let us not forget that this bill didn't touch the two white elephants sitting in the room. It did nothing to control Freddie Mac or Fannie Mae. Do you REALLY want to crow about this piece of legislation?

    Let's talk about the unions and the GM bailout. You claim he got concessions, okay there were some wage and benefit concessions at the price of giving the union a part of the company. Along WITH the taxpayer money of $58 billion that went to the union, not to mention the portion of the company that went to the Canadian government. Now GM is playing a shell game with we pay off the bailout money with bailout money. We take funds that should be paying off the bailout and buy finance companies and pay for lobbying congress. No, the BEST thing to do would have been to allow the automakers to go bankrupt, then they could have dumped the overpriced unions and started fresh. You think it was good what Obama did; I know it was bad. We were paying and still are, and yes, his union buddies made out like the bandits that they are.

    (continued on part 2 – post too long)

  17. Accurate Avatar

    (part 2)

    You talked about Obama's increasing the deportation of illegals. Hey, you're right and good for him (now along with the killing of pirates he's got two things right in 18 months of running the train). But let's not kid ourselves, why is he doing this? Is it because he's the defender of truth and the American way? Um, no, it's a bold effort to show that he's 'tough' on illegal immigration prior to a push to change our immigration system. Talking about how our system needs to be changed is a whole nother topic, just let's be clear about why Obama is doing this. IF (the big if) Obama really wanted to crack down on illegals, he'd support laws like the one passed in Arizona, not fight them.

    You talked about how he "fully behind the efforts to fire teachers and hold their accountable in DC and other places" … um, at this point it's just talk and with Obama talk is cheap. He is the consummate politician who doesn't know how to get off the stump. Anywhere there is a chance for him to stand on a soapbox and set up his teleprompter he does. Get back to me when he actually puts some teeth into his words. Want to put some teeth into it, start busting unions; then I'll believe.

    Obama's Afgan policy – to his credit, he hasn't cut and run like most democrats like to do. However, his 'wet-behind-the-ears' logic continues to show. He still hasn't learned that you don't tell a bully that you will be going home at a certain time because the bully will pretty much out wait you. No, you want to get rid of the bully, you hunt him down and make it so that he never knows where you will be, how long you will be there and what you next move is going to be. Obama still has a LOT to learn about both world politics and about war and handling enemies – grade D minus.

    Yes, after he was elected I admitted that I was a victim of Obama-derangement syndrome, the condition has only gotten worse based on his actions (and in-actions). Yes, he is trying to lead the US down the path of socialism, you do NOT prop up companies in a capitalistic society, you let them rise and fall on their own merits. Just Obama's beliefs (and actions) we should be subsidizing, with taxpayer dollars, buggy whip companies because those jobs could (did) go away and we can't lose them. Companies crash and burn and new ones come up in their place. Old business models fail as new ones overtake and over whelm them. Obama was not qualified for the office of president and he shows us that each and every day.

  18. Larry G Avatar

    Accurate – No bill/legislation, given the influence of corporate money is going to emerge "clean".

    I approved of expanding an FDIC approach to the financial community.

    Unless you consider the basic concept of FDIC wrong for banks also then why is the same approach not good for expansion.

    But I really only have one question for you.

    Of all of the things you say Obama did wrong – tell me what was done right with regard to these issues in the prior 8 years?

    And tell me with truthfulness that you think this current crop of Republicans if they were fully back in control would deal with any of these issues.

    What makes you think that the same ones who created the deficit and ignored it would do anything different right now?

    What makes you think they'd actually deal substantively with health care reform – so that it's threat to entitlement programs and the economy is reined in?

    And financial reform? ha ha ha. Remember guy, we ARE talking about the Republicans…

    and GM and Chrysler – yep they would have cut them lose and right now we'd be in the throes of a depression not seen since the last one.

    You have a right to dislike Obama.

    He was dealt a bad hand and his people are arrogant and don't listen…

    but if you think the Republicans are going to fix anything, you're dreaming…

    The current Republican Party is a total CF and you know it.

    The current Republican Party is the primary reason for the emergence of the Tea Party.

  19. Accurate Avatar

    Larry – tax cuts work, and the raw numbers prove it. Every time there has been a tax cut the amount of dollars that flow into the government coffers increases. It's so simple, we can have higher tax rates with fewer people paying or lower tax rates with more people paying. If companies and people are allowed to keep more of the money they earn, then they are more able to spend it, spread it. If I'm looking at higher taxes, higher expenses, I'm not going to buy 'whatever' – when I don't buy, fewer products get sold, another worker in the store, another worker in a plant, another truck driver get laid off. Now they aren't buying, and they aren't paying taxes and your solution is that we then need to tax those who are paying even more? So now I tighten my budget up more and buy less and another worker gets laid off? I don't have to go through the reverse process.

    Liberals love to say 'trickle down' doesn't work. Excuse me, what is there besides 'trickle down'? Regardless of if trickle down is trickling down from the government or if it's trickling down from a company it has to go from some entity that has money to those of us that don't have money. The questions are how does the entity get the money in the first place and how much do we the trickle-ees get in the end. It's trickle down no matter how you look at it. The only exception are those who take something raw and convert it to something that someone will buy – but the vast majority of us are not at that first tier level within the economic scheme.

    Bush was no angel, but Obama makes him almost look like one. Bush ran a deficit, so Obama comes in and triples it. Bush had some 2000 page bills, so Obama comes in and churns them out on a regular basis. Bush had back-room deals, Obama, our transparent president, holds them on each and every piece of legislation (or maybe its just that he's so transparent that we now see them on each of the deals). Don't like the man, never did, don't think I ever will.

  20. Larry G Avatar

    " Larry – tax cuts work, and the raw numbers prove it."

    what happened the last 8 years?

    more importantly – what happened to PayGO and what happened when it became clear that the tax cuts were not decreasing the deficit ?

    Ideology without dealing with realities is dumb.

    re: " Bush was no angel "

    but we're not talking about Bush here – we're talking about tax cuts and deficits healthcare and entitlements and how the Republican majority dealt with them.

    We're talking about who you'd like to replace Obama with whom you think will set things right and what evidence you have to believe that they'll actually do any more than they did the last 8 years.

    the tax cuts were a total failure guy…. admit it…

    all they did was create an enormous deficit…

    and NOW – the Republicans have no ideas on how to fix the deficit… other than cut taxes… totally idiotic.

  21. Accurate Avatar

    Larry – believe it or not, I DON'T think the republicans would do much better, overall, they are a bunch of boobs. However, the democrats running the deficit as high as they have are doing what??? Showing just how badly it can be done? Given the show that I've seen in the last 18 months I'm more than ready to run back to where it was 8 years ago or 4 years ago.

    No, I don't think the republicans are the light and truth, but I also know that the democrats scare me even more with their actions. Yes, I wish the TEA party was more of a viable alternative and maybe someday it might be; but for now, given the only two real choices that I have I know we can't continue to go down the path that the democrats are taking us down. And the only way to NOT go down that path is to get them out of office.

  22. Larry G Avatar

    re: tax cuts "work".

    tax cuts don't "work" if you consider that money can and does go overseas…and does not stay here.

    The jobs that are produced are not produced in this country.

    Until you can figure out a way to make sure the tax cuts go right back into our economy, all they are is a give-away to those who will invest overseas.

    fix that problem and I'm with you.

    Continue to blather on about some idealogical view that clearly has been proven wrong is not only not going to fix the deficit, it's going to actually make it worse.

  23. Larry G Avatar

    "the deficit"

    the vast majority of the deficit is what was already present in 2008 plus made much worse by plummeting revenues… and then add on the tarp/stimulus which comprises less than 1/4 of the total.

    The problem is until and unless the economy recovers then revenues will continue to drop and the deficit will continue to grow.

    The ONLY REAL CUTS you have are the military and the entitlements … it's a myth to think that the deficit is due to general govt spending.

    it's just not looking at the realities and wanting to actually deal with the realities and instead a blind adherence to ideology which is what drove us into the ditch to start with.

    The Republicans are dumb as stumps.

    They'd have this country into a full blown depression if they were back in charge.

    We'd might yet end up in a depression.. the numbers are not good.

    this is NOT the time to try to make further cuts in govt.

    doing that will cause a depression.

    Virtually every economist worth his/her salt, including many right-leaning ones are saying this.

  24. Accurate Avatar

    Larry, you know why we have a deficit as well as I do. It really doesn't have to do with tax cuts, it has to do with government expenditures. Doesn't make much difference how much you bring it if you are spending it faster. You can blame the wars, you can blame Medicare part D or Medicare as a whole. You can blame Bush and I'll counter with all the new crap that Obama has indebted us to. Makes no difference, the bottom line is that the government spends more than it brings in. We need to cut federal spending at all levels, across the board. Government is SOOOO bloated that it's not funny. We are in for at least two more years of economic bad news (probably more). If tax rates go up, it will be worse. If we don't pare down the federal (and local) governments, it will get worse. My little bit of power comes from my vote. Those who are in power now have made things worse not better. I WILL vote them out.

  25. Larry G Avatar

    " Larry, you know why we have a deficit as well as I do. It really doesn't have to do with tax cuts, it has to do with government expenditures."

    Accurate – you cannot cut taxes, and fund two wars and Medicare Part D and not expect deficits.

    At the least, when it became clear that the tax cuts were NOT producing the increased revenues that in theory would pay for the wars and Medicare Part D – where was the corrective action?

    Again.. it's blind ideology.

    You're entitled to your ideology but you are not entitled to ignoring the realities.

    It's not general govt Accurate.

    show me how general government has increased … it has not and certainly not to the level that has caused the deficits.

    this is dumb-as-a-stump reasoning.

    What's INCREASED in costs is the cost of the wars and entitlement programs….

    and … reduced revenues … from the tanked economy..

    again.. this is blind adherence to ideology even when the facts and the reality indicate otherwise.

  26. Larry G Avatar

    re: voting them out

    indeed.. but who will you vote in … anyone just to get change?

    ha ha ha

    this is what some folks did the last go around – right?

    If you think the Republicans are going to do anything substantial.. you're dreaming guy.

    they have no agenda for GOVERNANCE only an ideology that they want to RULE with and what Obama did – is the ultimate insult to them – he RULED when he got the majority and in the eyes of the Republicans nothing could be worse.

    They won't do anything when they are in charge and they oppose and obstruct when they are not.

    voting them in .. won't solve the problems the country faces.

  27. Accurate Avatar

    "What's INCREASED in costs is the cost of the wars and entitlement programs…. "

    And who oversees those wars, the departments that control them? Who oversees the entitlement programs and the huge bloated bureaucracy that runs them? The government. And with Obama continually adding to those programs. Are you aware of the many, many new 'agencies' and bureaucracies that both the new fiscal bill and Obamacare will create? I guess that's one way to cut down on unemployment but at what cost?

    No, we don't need all the extra entitlements that Obama wants (and some of what he got). We don't need bigger government, we need a smaller government. Where has the job growth been this year? Government!!! It hasn't been in the private sector. Heck, I'm one myself. I got laid off in the private sector and found a job with a government entity – and you know what? I'm appalled by the waste that goes on within it. Private sector, there is no more work today, go home. Public sector, work is done, do whatever to get your eight hours in. I work with folks who come in on overtime doing stuff that they could and should do on regular time. I was even looked at strangely when I was not sucking up overtime. It was/is not required but I was questioned that I "didn't like or didn't want overtime?" strictly because I wasn't taking/using it. No government IS a large part of the problem.

    All the new bureaucracies don't need to be formed, shouldn't be formed. We need to get rid of the department of education. We need to dis-band any and all government unions (the government entity that I work for has a union but you are not required to join it and I haven't). Just like with local governments, the feds have a whole lot of departments and bureaus that can go away forever.

  28. Accurate Avatar

    You're correct Larry, merely voting the democrats out doesn't insure ANYTHING. Well, it does ensure that that particular democrat isn't in office but that's all. But I (and millions like me) are tired of voting in a law like proposition 8 only to have a judge strike it down. We are tired of having a clear majority (according to polls) support a law like Arizona's only to have Obama fight it. We are tired of telling Obama and his henchmen at townhall meetings and in the polls that we don't want Obamacare but we get it shoved down our throats anyway.

    Will voting the democrats out stop it? No, probably not, but if I do vote them out my odds increase by a fraction that something will change. If I don't vote them out all I'm saying is that I'm absolutely fine with the way things are going – and Larry, I'm not fine with that.

  29. Larry G Avatar

    "And who oversees those wars, the departments that control them?

    as they have always.. including the last 8 years…

    The only programs that Obama has added is for Obama-care and as far as I know that's not happening right now.

    " Are you aware of the many, many new 'agencies' and bureaucracies that both the new fiscal bill and Obamacare will create? I guess that's one way to cut down on unemployment but at what cost?"

    tell me.. give me a number for the cost and then we can compare that to what we're spending on the wars.

    Otherwise, more right wing propaganda machine fear mongering.

    " we need a smaller government. Where has the job growth been this year? Government!!! "

    because of the stimulus – which is a purposeful strategy supported by virtually all economists because the private sector is dead and this is a temporary measure until the economy can recover.

    " We need to get rid of the department of education. We need to dis-band any and all government unions (the government entity that I work for has a union but you are not required to join it and I haven't). Just like with local governments, the feds have a whole lot of departments and bureaus that can go away forever."

    you had 8 years to do this and you did nothing except making bigger, more expensive, more bloated government.. have you calculated the new Govt employees to administer the Medicare Part D or the ramp up in producing body armor or humvees?

    I bet not.

    If you believe getting rid of the Dept of Education is going to fix the deficit.. you really are dreaming guy.

    again.. you're focused on your ideology and not the realities.

    If you want to shrink the deficit, getting rid of these tiny (by comparison) govt agencies is just plain lame.

  30. Larry G Avatar

    " are tired of voting in a law like proposition 8 only to have a judge strike it down."

    Now what does that have to do with Obama and the deficit?

    Where were you when Bush was telling the Supreme Court that they did not have jurisdiction over renditions and U.S. govt torture of people?

    The things you say you want – are not going to happen unless the far right wing gets a majority in both houses an the President..

    Ya'll are looking for a RULER – a DICTATOR.. not a Democratically elected government.

    Good luck on that.

  31. Larry G Avatar

    I'll not be surprised to see one or both of the houses of Congress get turned over to the Republicans nor to see Obama end up a one-term President..

    There is much to dislike right now – no disagreement here… but the idea that the Republicans are going to take care of the problems is downright laughable.

    Remember why they got voted out to start with?

    So people are so frustrated that they going to vote for "change" – any kind of change as long as it is not a continuation of the current administration.

    but again.. anyone who is expecting the Republicans to take care of the problems is whistling Dixie.

    They had PLENTY of OPPORTUNITY in prior 8 years to START on the problems – to lay out an agenda for the future and what did they do?

    And now, when you listen to them, what are they saying they will actually do?

    tort reform?

    more tax cuts?

    repeal and replace?

    "cut" government

    stop the stimulus?

    ha ha ha

    Are the Republicans going to:

    reform SS and Medicare?

    start paying for the wars?

    create jobs (with tax cuts)?

    get rid of judges they don't like?

    fix Fannie and Freddie?

    help small businesses get health insurance for their employees?

    how about this.

    you tell me what specifics you want to see them do.. …

    tell me what you expect them to accomplish….

  32. Accurate Avatar

    – " are tired of voting in a law like proposition 8 only to have a judge strike it down."

    Now what does that have to do with Obama and the deficit? –

    It just more of the same where what the people WANT – weren't not getting. Our collective will is being denied.

    " we need a smaller government. Where has the job growth been this year? Government!!! "

    – because of the stimulus – which is a purposeful strategy supported by virtually all economists because the private sector is dead and this is a temporary measure until the economy can recover. –

    Oh Pleeze, tell you that you really think that the positions created in government (beyond the census) are actually going to go away when the economy recovers. REALLY? Um, I don't think so.

    And no, I don't want the dictatorship that I feel Obama is putting together (bit by bit, piece by piece) – that is why I'll be voting HIS henchmen out of office this November.

  33. Larry G Avatar

    " Now what does that have to do with Obama and the deficit? –

    It just more of the same where what the people WANT – weren't not getting. Our collective will is being denied."

    what about the Law and the Constitution?

    I thought you guys were opposed to majority vote if it violated the Constitution?

    or is it only for the things you believe it?

  34. Larry G Avatar

    " Oh Pleeze, tell you that you really think that the positions created in government (beyond the census) are actually going to go away when the economy recovers. REALLY? Um, I don't think so"

    then how about showing me the numbers …??

    do you count the DOD civil service which in turn supports the wars as "growth" in govt?

    How about Medicare Part D – do you consider that "growth" in govt?

    how about immigration personnel?

    Would you consider that a "growth" in govt?

  35. Larry G Avatar

    " And no, I don't want the dictatorship that I feel Obama is putting together (bit by bit, piece by piece) – that is why I'll be voting HIS henchmen out of office this November. "

    so… Obama is not allowed to be the "decider" eh?

    but it was okay to have a "decider" when you agreed with him and his "henchmen"?

    ha ha ha

    good luck on that guy.

    What's the BEST you can hope for come fall?

    Would it be a veto-proof Republican majority?

    who knows.. it may well happen but don't count on the new majority to do much more than they did the first 8 years…

  36. Gooze Views Avatar
    Gooze Views

    TMT,
    Barney Frank didn't become head of the House FInancial Services Committee until after the 2006 elections. So, you can't blame him for Freddi and Fannie which happeneed some years earlier.
    Now on NOT regulating Freddie and Fannie, I agree you have a point.

    Peter Galuszka

  37. Larry G Avatar

    The Barney Frank narrative is a scream.

    Here's one guy.. in the minority who apparently has cowed the President, the House of Representatives and the Senate from doing anything about Fannie/Freddie.

    This would be the same President and Congress that slam-dunked, tax cuts, getting rid of Paygo, credit-card funding for two wars, Medicare Part D and numerous other legislation…

    but when it comes to Fannie/Freddie.. they run into a brick wall called Barney Frank.

    I've come to the conclusion that this is necessary for those who can't accept the fact that the Republicans could have and should have reacted to Fannie/Freddie and so those folks have to have someone to blame and it can't be the Republicans – or else then they are totally exposed for the hypocrisy of admitting that the Republicans are the ones that stood by and watched Fannie/Freddie facilitate derivatives, credit-default swaps and toxic assets.

    They knew what was going on with Fannie/Freddie but their "excuse" for not acting is that Barney blocked them.

    And these are the same folks that the apologists want backin control….

  38. hospitals, insurers and doctors — have utilized their political power to entrench their positions in the medical marketplace and ward off competition. For all practical purposes, independent entrepreneurs are prevented from devising new models for delivering health care.

    That’s why Obamacare is not the answer.

    ==================================

    But if it doesn't work, Obama will get the blame.

  39. "Ray may like HCR because he is a relative winner. He doesn't have something and will get some, albeit at a cost."

    =================================

    Nope, I have employer provided health isnurance, just like most people who have health insurance.

    But, I went through the drill of becoming sick enough to lose my job and my health isnurance with it and then being unable to buy health insurance at any cost – even if I had been able to afford it without a job.

    I saw first hand what a FRAUD health insurance was after paying for it for 35 years and receiving none when I most needed it.

    Obamacare will no doubt wind up costing me and everyone else more money: but at least you will have SOME chance of collecting when you need to. And yet, some people claim there will be no improvement in health care services.

    Im in favor of HCR not because of what I get from it but because I've seen first hand what a giant catch 22 our previous system was: "We'll insure you as long as you are healthy enough to work and pay us." I'm in favor of HCR so that no one else ever has to go through what I(and then my wife) had to go through.

    When I retire, I'll still have to buy my own insurance, but at least now they cannot simply say "No."

    If you think about it, medicare is a giant subsidy to the health insurors, who no longer have to pay claims for the older people most likely to have claims. If you hate medicare, you will love it when it goes under and all those costs of elder care are transferred to your premiums.

  40. But where are the other reforms?

    =================================

    I think they were given away or passed up on because of Republican opposition. In the end, Obama and the Democrats took what they could get.

  41. Larry G Avatar

    Ray is 100% on target.

    and the real frauds are those who are lucky enough to have HC and refuse to see the problems that others have who don't have it and cannot get it.

    It's very clearly "I've got mine, I don't care about you".

    until of course they find themselves in the same predicament and then they come whining to the govt for help.

    Medicare is totally subsidizing the employers these days.

    In virtually every case, the employer-provided insurance is not the PRIMARY but the secondary.

    They pick up whatever Medicare doesn't pay.

    and in most cases, they charge the same premiums they did before the person retired.

  42. Anonymous Avatar
    Anonymous

    Getting something. There are some winners, but what do you say to the 30 some of my former co-workers who will most likely lose their retirement healthcare because of HCR? I guess they just need to be noble about it. Someone else benefited.

    Watch the next round of health care referenda in Arizona and Oklahoma.

    TMT

  43. Larry G Avatar

    what it eventually boils down to is 1/2 of us having very, very good insurance and the other 1/2 no insurance.

    Now.. I know folks apparently recognize the disparities and dangers is not having a middle class and I would assert that allowing us to get to a situation where 1/2 of the country does not have access to health care – will lead to things even more undesirable than some of the impacts of ObamaCare.

    And the really interesting thing here is that the employers who most often offer "good" healthcare insurance are… the govt… so we have people who cannot get health care – paying significant property taxes so that teachers and county employers can get good health care.

    How long before this backfires?

    People can vote all they want to in these proxy referenda – the real question is what do they do afterwards to go forward?

    A country where 1/2 cannot get health insurance is not going to be a pretty sight.

  44. Getting something. There are some winners, but what do you say to the 30 some of my former co-workers who will most likely lose their retirement healthcare because of HCR?

    =================================

    Paid retirement healthcare? Who gets that except people with the largest and most generous companies or maybe government/military?

    Anyway, they have not lost it yet, and if they do there will still be medicare.

    What happened to me and many others is a real problem that actually happened, not conjecture as to what some future regulaton might cost or what some employer might do, or what they might blame their move on.

    Yes, I concede, this will cost more money, but if it costs money and you get coverage it is better than my old system where it cost money for 35 freaking years and then I got zero, nada, zip xcept the opportunity to get the same coverage at twice the rate under COBRA. For a while. Then, after they really bleed you broke (just when you can afford it least), you are on the street with nothing.

    I was extremely lucky. It only cost me half of my retirement plan, but I could have been linke many others, medically bankrupt. Fortunately, I got well enough to go back to work, and magically, as soon as I was well, I could get health insurance – as long as I work, but as a private individual, forget it.

    Now, under HCR they cannot turn me away, although nothing revents them from offering a price no one can afford.

    If your friends lose their retirement health care someday, well, they will be in the same boat as 98.5 percent of the rest of us. Start bailing.

    But, if they lose something they have actually paid for so that others can be better off, the that is a Kaldor-hicks problem that should be addressed. Let them bring it up with the do-nothing Republicans and maybe they can get some help there.

    If there were real problems with the plan they could have worked to fix them, but that didn't happen: The Republicans refuse to fix the leaks and refused to bail – now they are waiting for the ship to sink.

    That's a strategy that works for them because they have better life preservers than most of the rest of us.

  45. Larry G Avatar

    " Who gets that except people with the largest and most generous companies or maybe government/military?"

    who gets retirement health care?

    virtually every Federal, State and Local govt workers do.

    If you work for the Feds or the State of Va – you get retirement health care.

    They get the same deal that many unions get – the same unions that the right wingers are saying should be banned for negotiating "too good" benefits – the same benefits that people will jump at a govt job to get.

    No one seems to appreciate the fact that out of all the industrialized countries in the world – they all pay 1/2 what we do for health care, they are all covered, an they all live longer than us.

    what I've been told about this is that we are a nation of "fatties" and we are in terrible health and need much more expensive health care to keep us alive.

    think about that.

    think about every product and service that we sell – have these costs embedded in it.

  46. Anonymous Avatar
    Anonymous

    A number of things could have been done without passing Obamacare. 1) permit consumers to purchase health care policies across state lines (get around heavy mandate states) 2) allow small businesses and individuals to join purchasing pools; 3) cut the stones off the medical malpractice lawyers; 4) increase medical savings accounts; 5) allow for the importation of drugs from other countries (see I like some ideas from Democrats).

    Once the big pharma companies agreed to sell in other countries with price controls, I think they forfeited the right to complain about the prices.

    These changes would have made improvements.

    TMT

  47. Larry G Avatar

    TMT – oh we agree. what were they not made?

    1) permit consumers to purchase health care policies across state lines (get around heavy mandate states)

    so you would advocate the Feds intervene in States rights issues?

    2) allow small businesses and individuals to join purchasing pools;

    again.. is this not a Federal control?

    3) cut the stones off the medical malpractice lawyers;

    did you want the Feds to preempt state law?

    4) increase medical savings accounts; 5) allow for the importation of drugs from other countries (see I like some ideas from Democrats).

    or let the Feds use the current VA authority to buy drugs in bulk>?

    All of these things that you mention require action by the Feds – right?

    so why were none of them done by the Republicans?

    and … would you expect any of these to be in the "replace" part of repeal & replace?

    I've said all along – just about anything that the Republicans started on would have likely formed a baseline for the Obama administration.

    It would have been difficult to dismantle something that already had been done and had support.

    I'm no lover of Obama nor Obama_Care – it is what it is – and it's the only real reform that we've seen – and in my view – will see even if the Republicans regain power.

    Republicans are fundamentally opposed to the govt being involved in Health Care.

    All of those thing you named would have required Republican support to pass in the prior 8 years and it simply did not have their support.

  48. Anonymous Avatar
    Anonymous

    Larry, there is a difference between the federal government regulating interstate commerce and making someone participate in interstate commerce. The feds can say "Larry, you have a right to travel to Maryland or to order a book from North Carolina." That's regulating interstate commerce. I don't think the feds have a right to say "Larry, if you don't take your vacation in Baltimore or Ocean City or buy your books from a bookseller in Asheville, you must pay a fine." That's a crucial difference.

    President Obama and the Democrats in Congress have gone beyond regulating interstate commerce to insisting that people participate in interstate commerce. That's what the court challenges are about!

    TMT

  49. Larry is right about point one. This requires fed intervention. If I'm not mistaken this actually got included in O-care, but the point is moot on account of minimum requirements.

    As for group purchases, they were already allowed. That's why we have employer insurance. No new law was needed, but the insurors never stepped up to the plate.

    Health savings accounts could be made larger and more beneficial. However they still lack the risk sharing benefits of insurance.

    In my health crisis I wiped out half my retirement plan. If I had further reduced my lifestyle to fund a health savings account then it would have been wiped out first.

    If I had a real health crisis instead of a simple chronic ailment I would have been wiped out of both plans in any case. Health savings plans are a good idea but not a replacement for insurance.

    Pubs are still free to advance HSP improvements, but they would rather focus on repeal.

    When I was insured the insurors used my premiums to pay the claims of others (who were still employed and still paying premiums of there own). But when my turn came to collect some back……well tough luck because you don't have a job, you shiftless SOS.

    We need to stop that kind of thinking.

  50. The feds require you to pay taxes on income earned entirely in state. In doing so they require you to pay a portion of things you will never enjoy, like light rail in Batavia Ohio. The idea that you(the feds) can't force me to pay for something I'm morally opposed to is part of the church and state conundrum..

    I don't see that the forced to pay argument has much traction.

  51. Larry G Avatar

    The feds make you pay for Medicare..

    what's different?

    what if the Dems, had instead, lowered the age on Medicare to 50, 40, or 25.. when it then have been illegal?

    Is the Supreme Court going to outlaw Medicare?

  52. Anonymous Avatar
    Anonymous

    Larry, Medicare is funded by a federal tax. Congress has the authority to impose taxes. It doesn't have the right to make people participate in interstate commerce.

    TMT

  53. Larry G Avatar

    TMT – health care is a Federal Tax…. also….

    Are you saying that if they just reduced the age of Medicare to age 30 that it would have been legal…

    but it's not legal to impose a tax on someone who does not have insurance?

    Sounds to me that the govt could put the tax on every one and then on the taxes – give a refund to those who had insurance… just like they do with medical expenses, right now, ….. just change the threshold.

    Are you saying the Feds cannot let you deduct medical expenses including insurance costs on your taxes?

  54. Larry, Medicare is funded by a federal tax.

    =================================

    So It would have been OK to have national health care funded by a tax?

    We could look at required health insurance as a user fee, that way there would be no new taxes and no one would have to pay for the improvements we got.

  55. Anonymous Avatar
    Anonymous

    I've not researched the issues, but I would think the feds could have passed a law making Uncle Sam the national health care funder through taxes. However, it probably would not pass and, if it did, an awful lot of those who voted for it would be turned out from Congress. With the track records of Social Security and Medicare, it doesn't seem like national health insurance would be successful. The Democrats would lose 100 seats in the House by nationalizing health care.

    TMT

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