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Entitlements and political will
Posted by: mcq on Thursday, February 15, 2007

First, study the chart:



Breaking out a few sentences in an otherwise lengthy article, let me give you the essence of the problem as articulated by Robert Samuelson:
The charts show the rise of the American welfare state. In 1956, defense dominated the budget; the cold-war buildup was in full swing. The welfare state, which is what "payments to individuals" signifies, was modest. Now everything's reversed. Despite the war in Iraq, defense spending is only a fifth of the budget; so-called entitlement payments to individuals are 60 percent—and rising. In fiscal 2006, the federal government spent almost $2.7 trillion. Social Security ($544 billion), Medicare ($374 billion) and Medicaid ($181 billion) dominated. There was $199 billion more for payments to the poor, including the earned income-tax credit and food stamps, among others.

[...]

The welfare state has made budgeting an exercise in futility. Both liberals and conservatives, in their own ways, peddle phony solutions.

[...]

Annual budget debates are sterile—long on rhetoric, short on action—because each side blames the other for a situation that neither chooses to change. To cut spending significantly, conservatives would have to go after popular welfare programs, including Social Security and Medicare. To raise taxes significantly, liberals would have to go after the upper-middle class, a constituency they covet (two thirds of all federal taxes come from the richest fifth). Deficits persist, because neither side risks its popularity, and indeed, both sides nurture it with new spending programs and tax breaks.
Samuelson makes the argument that entitlements are a euphemism for "welfare" and that the question that should really be put to Americans is are you willing, at any time in your life, to accept welfare? He feels that might actually change the debate to the point that real action might be possible.

I'm not so sure. It seems to me this is more of a result in a sea-change in thinking among Americans rather than some trick of wording. But to be blunt, it's going to bankrupt us. 3 trillion dollar budgets with 60% (and growing) going to untouchable entitlements?

But, if you listen to most of our politicians, especially on the left, there's "no problem" - move along, nothing to see here.

I assume when it finally staggers one last time and comes down in a crashing, smoking heap we may find the political will to face the problem. But then, political will, as we see everyday in the "debate" about Iraq, is and has been in short supply for some time. Why in the world should we expect our elected reps to address something important like entitlements and their cost when they're busy demonstrating their lack of political will by fighting over non-binding resolutions.
 
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”...political will, as we see everyday in the "debate" about Iraq, is and has been in short supply for some time. “
Actually, there is plenty of political will to shape up Social Security. As the Greatest Generation totter off into that good night and the Boomers take over, the framing problems for Social Security reform will disappear. Unlike their parents, the Boomers know damned well that SS is welfare. In order to understand the framing problem, one must go back to the days when SS was being introduced in America.
It was originally sold to the voters as INSURANCE*:
“You know, like everyone pays their monthly premiums to The Rock so that their widows and orphans can eat and keep the house. It’s just that The Government was going to collect the premiums and pay the benefits instead of Prudential – otherwise it was just like REGULAR INSURANCE. You see, if it were Socialism (what idiot insisted on calling it SS?) which we know you all (well, mostly, except for the members of the Communist party [oh, yes, many Americans were members of the Communist party then – sort of like being a far leftist today]) hate, we would take money from everyone, but give benefits only to a few who need it. As you can see, EVERYONE gets a SS benefit if they live long enough. Therefore, it is clearly INSURANCE NOT SOCIALISM.”
Nowadays, the Boomers are well aware that, unlike INSURANCE, there is no fund being accumulated to pay the benefits; they are paid out of current revenues (Yes, sigh, it is exactly a Ponzi scheme). However, we still will be paying Bill Gates full retirement benefits because of the original packaging required to disguise and install this Socialistic program. The original packagers were correct in their belief that, once the public saw the benefit of having the program, they would love it.
Boomers know (and many love) Socialism and have no problem with the nature of the Social Security program. So as soon as the strongly anti-Socialist folks die off, paying benefits only on a “need” basis will be no problem. The Boomers have been raised on a system that takes taxes and returns no benefits to those who paid the taxes and instead pays the benefits to the more indolent (or unfortunate) segments of our society. No problem.
The Boomers know that the Government pays the benefits, not some mythical trust fund, so that worthless concept can be laid to rest. Real reform will be relatively painless, once there are no Greatest Generationers left to protest calling the spade a Socialist spade.
The Barack Obamas of the future will properly frame reforms and they will sail through.
* Not an actual quote. I made it up.
 
Written By: notherbob2
URL: http://
Not an actual quote. I made it up.
No kidding. My car insurance only pays off when I have an accident, which is an unusual event. In fact, insurance exists to cover unusual events.

Living to be 65 is not an unusual event.
 
Written By: Mark A. Flacy
URL: http://
Well, Mr. Flacy, I see your point (I’ll skip over the part about the top of your head). Life insurance and annuities, the paradigms for SS, deal with folks who are 100% going to die, whether or not they have an auto accident or reach age 65 prior to doing so. So, what’s your point again? I am too lazy to look up the old real quotes from the Thirties, but I recall them from my CLU and ChFC (life insurance industry credentials) studies. Any help out there?
 
Written By: notherbob2
URL: http://
Americans have paid about 15% of thier annual wages (under $97K)wages to pay for the Social Security Old-Age, Survivors, and Disability Insurance (OASDI). Its a bit much to accuse people who have paid that much of looking for welfare.

They are going to be pissed when the money runs out. Someone will point at the war. Someone will point at corporate welfare. Someone will point out that wages are taxed at a higher rate than profits. Class warefare has never been a very winning political strategy in this country. That will change the moment the social security checks bounce.

That will be a bad day to be a republican.
 
Written By: cindyb
URL: http://
That will change the moment the social security checks bounce.

That will be a bad day to be a republican.
And why would that be?
 
Written By: Mark A. Flacy
URL: http://
Life insurance and annuities, the paradigms for SS
Does not the former imply a lump sum benefit at someone’s death? Does the latter include cost-of-living increases?

Since you have...
(life insurance industry credentials) studies
...perhaps you could educate those of us who don’t. And I won’t mention the brown eye in the middle of your forehead.
 
Written By: Mark A. Flacy
URL: http://
Well, ignoring the $250 lump sum death benefit from SS and also (and this is really a bit of a leap, considering how much money is going out to survivors) the survivors benefits, SS is very like a deferred annuity. Deferred annuities are very popular insurance products. The purchaser usually pays a lump sum when they have the money and defer receiving the monthly annuity benefit until a future time. In the meantime, the insurance company invests the lump sum in safe, liquid and secure investments. At the election of the purchaser, a monthly amount is paid out over their lifetime, no matter how long they live. Cost of living increases are possible, however, unlike SS, they are somewhat illusory in private annuities, since the purchaser pays the exact cost of this feature ahead of time. In SS, the taxpayers eat this cost. Some die quickly and their funds are used to continue payments to those who live longer than the average. Actuaries do the math to make all of this happen without running out of money. Of course, the insurance company takes a cut here and there for their profits and to pay a commission to those who sell the product. The 50 state governments (one of the rare areas where the Feds have yet to stick their noses) audit the insurance companies to make sure that they are safeguarding the funds prior to the payouts and that everything operates above-board. There are even guarantee funds to bail out insurance companies that fail (rare).
As originally designed, SS provided for a trust fund into which the contributions would be invested so that at any given moment in time the fund would be equal to the discounted amount of future benefits owed to participants.
For some reason(?), unlike private insurance companies, Congress allowed the SS program to get out of whack. Benefits were increased without sufficiently increasing contributions. Cost of living benefits were added, again without sufficiently increasing contributions. As contributions were increased, even more benefits were added for those hit with the increases so that the increases would be politically digestible. People were granted full benefits who had not contributed for the anticipated full period. Finally, the trust fund was "borrowed" and replaced with IOUs. It is now more or less a petty cash fund used to avoid a payment crisis in a bad political year. Benefits are currently being paid out of current contributions. In other words, it is funded just like welfare, except that everyone, regardless of need, expects a benefit. And don’t get me started on the "double dippers" who are expempted from paying the contributions because government pays for their pension, but who are allowed to draw full SS benefits if they contribute to the SS program for the minimum time period after they retire with full benefits from the government for both programs. Stupid CindyB thinks that the Republicans are responsible for abuses like that. Not so much. It is the public employee unions who have the political muscle to get these benefits at the expense of everyone else.
Did I answer your question?
 
Written By: notherbob2
URL: http://
Oh, is anyone unclear about which political party is identified with pulic employee unions? I thought not.
 
Written By: notherbob2
URL: http://
They are going to be pissed when the money runs out. Someone will point at the war. Someone will point at corporate welfare. Someone will point out that wages are taxed at a higher rate than profits.
To those finger pointers, I mention this:
In 1973, the Social Security Board of Trustees began to project financial problems for the system in both the near and long term. The financing problem grew worse throughout the mid-seventies.

The near-term problem was caused primarily by adverse economic conditions. Much higher-than-expected inflation caused benefit levels to soar, and aggregate expenditures to do likewise, while lower growth in real wages and higher unemployment caused revenues to grow more slowly.

The long-term problem was caused in part by less favorable demographic trends. For example, based on new population data, the long-term fertility rate assumption was lowered. This reduced the projected number of workers who would contribute to the system in the next century. However, the largest part of the looming deficit (it was estimated in 1977 that costs would outstrip revenues by 75% over the next 75 years) was caused by changes in the underlying assumptions about future economic conditions. Under the 1972 law, future benefit levels were highly dependent upon the future relationship of wage and price growth. As a result, future benefits could be lower or higher than intended, and the prevailing view in the mid-1970s was that they would be much higher than anticipated. In fact, it was projected that if the benefit computation rules were left unchanged, benefits for many individuals retiring in the future would exceed their earnings before retirement.
http://usinfo.state.gov/usa/infousa/society/socwelf/ss2000.htm


Well before the Iraq war, well before "President Bush" or "president Reagan" existed, well before deficits hit 100 billion a year, well before capital gains tax rates hit under 50%, well before the upper tax rate dropped 20 points or the terms "voodoo economics" or "corporate welfare" were coined, there were concerns about the solvency of Social Security.
 
Written By: h0mi
URL: http://
Americans have paid about 15% of thier annual wages (under $97K)wages to pay for the Social Security Old-Age, Survivors, and Disability Insurance (OASDI). Its a bit much to accuse people who have paid that much of looking for welfare.
So you must be in full support of opting out of the ponzi welfare scheme if one so chooses. Or at least you must be in full support of private accounts. Right?

Hello... cindyb are you out there?
 
Written By: meagain
URL: http://
Cindy B reads the chart and still says the solution is to de-fund national defense some more, or raise taxes some more. Amazing. That solution apparently has been tried since 1956 to 2006 and we still have the problem, no?

Also, as regards to blame, most young people know who is to blame: the party that started the program, the party that ruled the Congress for most of the time during the program’s history, and the party that supposedly cares more about these matters. (The Democrats) In fact, when the GOP offered up some reform ideas, this same party told us SS was not broken at all.

Are you really going to blame the people who told you it was going to break, and then it did break or the people who kept saying, "naw, it’s fine..."


 
Written By: Harun
URL: http://
when it finally staggers one last time and comes down in a crashing, smoking heap

in all seriousness, what is "it" in the quoted phrase? The US economy?

 
Written By: Francis
URL: http://
"...in all seriousness, what is "it" in the quoted phrase? The US economy?"
Another confused liberal; caught between Lalaland and Reality, wondering what is a fact and what is not. One is saddened.
 
Written By: notherbob2
URL: http://
in all seriousness, what is "it" in the quoted phrase? The US economy?
What’s the post about Francis?
 
Written By: McQ
URL: http://www.qando.net/blog
We have the wealthiest poor people in the world. Why is that bad? We should be proud of this fact. No tin-roofed slums like Brazil. No children playing in open sewers running down the street.
The crime in America is generally non-violent in comparison to most other countries. No kidnappings and relatives being held for ransom. No child gangs with AK-47s, knifings, beatings and ’thuggings’ for their bread. More people in prison for drug use than for assaults. No insurgents.
Yes, there are still crimes in every major city that I visit. No place is perfect, but compared to other cities I have visited in the world, we should be damn proud of our way of life and what we provide for others.

I don’t have a problem when the government takes my money and gives it to the hungry and the poor. I have a problem when they give it to wealthy people, big business, and foreign countries.

 
Written By: kindlingman
URL: http://
in all seriousness, what is "it" in the quoted phrase? The US economy?
Why do you think it isn’t Social Security?
 
Written By: h0mi
URL: http://
ahem. our host wrote: 3 trillion dollar budgets with 60% (and growing) going to untouchable entitlements?

But, if you listen to most of our politicians, especially on the left, there’s "no problem" - move along, nothing to see here.

I assume when it finally staggers one last time and comes down in a crashing, smoking heap we may find the political will to face the problem.


both "budgets" and "entitlements" (neither of which are written in the singular) are the nearest likely nouns to which "it" refers. If the budget comes crashing down in a steaming heap, that suggests that the US government is unable to pay its bills, has defaulted on outstanding bond debt and cratered the entire global economy. "Entitlements" coming down in a steaming heap is nonsense. It’s a meaningless phrase.

Soc. sec., as anyone with access to google can find out, is running a surplus, and investing the surplus in government bonds. In this way it is acting very much like an extremely conservative pension fund. Soc. sec’s ability to pay future claims (again, as anyone with access to google, or who is willing to think about the issue hard, can figure out) depends on (a) immigration and (b) productivity growth. Assuming that the country will be vastly wealthier in 40 years than it is now (see the discussion on global warming), SS can continue to meet its statutory payouts essentially in perpetuity.

the entitlement program running a massive deficit is medicare / medicaid. This at the same time as health insurers are earning massive profits. There are, in essence, two options: persuade more than 50% of americans that those who cannot afford emergency care should be denied care, or health care insurance should be a not-for-profit pool in which we all participate. (the third option is raising taxes. but i wouldn’t suggest that here.)
 
Written By: Francis
URL: http://
both "budgets" and "entitlements" (neither of which are written in the singular) are the nearest likely nouns to which "it" refers.
Please Francis, you’re smarter than this ... "bugets" aren’t the problem, are they? Budgets are simply a device.
 
Written By: McQ
URL: http://www.qando.net/blog
Soc. sec., as anyone with access to google can find out, is running a surplus, and investing the surplus in government bonds.
What the government does with the tax money it collects that does not go to paying current SS recipients is certainly not "invested" in any sense of the word. The government is simply spending that money on other programs and putting an IOU into a little file cabinet in Washington, the mythical "Lock Box". The "interest" earned on those treasury bonds is paid by the taxpayers (out of general funds) to the government general fund and spent.

Question: When the government goes to redeem these bonds, where does the money come from? Answer: Taxes in the year in which the bond is due. So the "surpluses simply act as a mechanism to increase the massive unfunded liability of the U.S. government.

If any public company in this country tried to pull such a scam they’d be thrown in jail. What’s funny is that the people who have perpetrated this massive fraud are the same people who also take it upon themselves to tell other people how to do accounting. When it comes to accounting fraud, the old adage "Takes one to know one" certainly applies.
 
Written By: DS
URL: http://
"Soc. sec.... is running a surplus, and investing the surplus in government bonds. In this way it is acting very much like an extremely conservative pension fund."
Well, there you have it, right in front of your eyes. A stupid liberal, lost in Liberal Lalaland.
"...it is acting very much like an extremely conservative pension fund."
HAHAHAHA! The sheer ignorance is a howl. Francis you are a fool (but, I guess, one who can google). Get your head out of Lalaland and get some facts. I won’t waste my time shooting down your idiotic statement any further.
 
Written By: notherbob2
URL: http://
A stupid liberal, lost in Liberal Lalaland

Yes, gentle folk, I’m talking about intolerance. If you’re interested in civil debate, if in fact that’s of value to you and something you want more of, don’t tolerate the other kind. Why must we give into the vulgarians? Why must they be the ones who set the tone?

why indeed?

how many multi-year financial commitments does the US Govt actually make in any given year? essentially zero. everything in the budget is subject to annual appropriation.

except.

by statute, the USG has made multi-year, indeed multi-generational, financial promises in the form of a public pension commonly known as Soc. Sec. Like a private pension, this public pension is funded by direct withdrawals from paychecks. Like some union pensions, the system does not allow for opt-out. Opt-out is allowed only if the entire system is restructured, which requires a vote of the members.

Because of the separate revenue stream and because of the multi-year financial commitment, it is rational (but not required) to consider the SSA as a separate legal entity from the general treasury.

Looking at Soc Sec as a separate legal entity from the rest of the government, much as a pension fund is a separate legal entity from the corporation which manages it, the US Treasury debt is about 8.7 trillion, 4.9 held by the public and 3.8 held largely by the SSA. (try this site for further info.)

Can the President repudiate the SSA debt? well, he can try. unless Congress approves the action i think it’s likely that a court would find the debt validly existing, so the Treasury would have to sell public debt to pay a demand by the SSA.

can congress repudiate SSA debt? absolutely. of course, they might want to consider the impact on the global financial market, not to mention their political careers, before voting to abolish the SSA.

Can we afford to pay the commitments made by statute? Here, there is tremendous disagreement. K.Drum has had a series of posts (as has Brad deLong) arguing that minor adjustments to the SS program will pay for the program in perpetuity so long as Treasury pays off the SS debt on demand.

Is SS a bad program? For libertarians, absolutely. The only way to opt out is to work for a small category of employers (state and local governments, mostly, but not oneself) whose employees are statutorily exempt from soc. sec. On the other hand, SS has dramatically reduced elder poverty. It supports the free mobility of labor. It is an essential element of the retirement planning of hundreds of millions of Americans. etc.
 
Written By: Francis
URL: http://
A stupid liberal, lost in Liberal Lalaland

Yes, gentle folk, I’m talking about intolerance. If you’re interested in civil debate, if in fact that’s of value to you and something you want more of, don’t tolerate the other kind. Why must we give into the vulgarians? Why must they be the ones who set the tone?

why indeed?
Agreed. And your point?

As to the rest, it’s about "entitlements", Francis.

And the amount of the "budget" they continue to eat up. The rise in the government "budget" isn’t due to defense or interest on the debt or even ’all other’. The strain comes from entitlements. And as I figured you might understand, that growth has been huge (as demonstrated by the handy charts I included) and is, at this moment, untouchable ... both legislatively and politically.

That’s what the entire post was about ... and while it was nice of you to parrot the arguments that government IOUs don’t represent debt but instead assets and thus SS isn’t in trouble, your questions and comments about SS miss the point entirely.
 
Written By: McQ
URL: http://www.qando.net/blog
do you believe using the word "parrot" is consistent with avoiding a vulgar tone? are you parroting right-wing talking points without thinking for yourself, or are you capable of independent analysis?

Your sleight-of-hand in conflating SS payments (an ongoing self-financed program not in trouble) and Medicare/Medicaid payments (annual programs in enormous trouble) suggests that you’re parroting, not thinking. or am I being vulgar?

As to defense not constituting a strain on the budget, you must be joking. There’s no iron law of national defense that requires that the DOD, DHS, DOE, and VA consume 5% or 6% or more of GDP. Nor is there an iron law regarding the percentage of GDP which should flow into the federal coffers.

The size of the federal budget and the allocation in the budget between guns and butter are value choices. You may legitimately disagree with the value choices. But suggesting that the current allocation of funds based on those value choices will lead to something collapsing in a great smoking heap is simply wrong. We can, as a society, choose to increase federal revenues and/or slash defense spending and continue to fund two tremendously popular medical care programs without the Republic crashing into ruins.

It’s also worth noting that the country is far richer than it was in 1956. We can choose, if we want, to divert some of that wealth into health care programs. Holding the size of the two pie charts constant is the kind of gross distortion that leads to the old saying about 3 kinds of lies.
 
Written By: Francis
URL: http://
do you believe using the word "parrot" is consistent with avoiding a vulgar tone?
No I don’t Francis, but I am amused by this apparent obsession of yours to try to find something, anything, by which to be offended. Again, I thought better of you.
Your sleight-of-hand in conflating SS payments (an ongoing self-financed program not in trouble) and Medicare/Medicaid payments (annual programs in enormous trouble) suggests that you’re parroting, not thinking. or am I being vulgar?
With your apparent tone-deafness concerning vulgarity, I’ll leave it to you to sort out.

Again, if you wish to buy the premise that SS is all paid up, fine. IOUs have never been considered by most to provide a firm financial foundation to anything, but you’re welcome to your interpretation of the data.

You’re also welcome to continue to believe that untouchable entitlements with automatic cost of living adjustments built in by law aren’t a problem if you wish. But again, unless there’s magic involved someone has to pay for all of this.

You note that Medicare and Medicaid are in enormous trouble yet then opine "We can choose, if we want, to divert some of that wealth into health care programs." Really ... from debt service, defense or "all other"? And what do we do when that entitlement slice is at 80% or 90% and those programs are still in "enormous trouble?"

Any guess as to what "value choices" will be made when government is forced to go after the majority of a taxpayers income?
 
Written By: McQ
URL: http://www.qando.net/blog
i don’t think i’m being unreasonable in being offended either by Notherbob2’s post or your parrot language. but you’ll have to let me check my Liberal Blog Commenter Offensensitivity Manual which i left at home this morning.

my usual response to parades of horribles is to say that we can cross that bridge when we get there. Samuelson’s graphic is fundamentally dishonest, becuase it fails to recognize the increase in the wealth of the country.

you persist in saying stupid things too, like IOUs have never been considered by most to provide a firm financial foundation to anything.

I’m sure all the holders of publicly and privately issued debt (which likely includes you if your retirement portfolio includes any corporate, municipal or treasury bonds) around the world would be astonished by this. As would the bank holding the note on your house and car. As would credit card companies. As would ... well, just about anyone who has ever extended credit in any capacity. Debt is the foundation of modern capitalism.

Think first, then type.

As to the problems with Medicare/Medicaid, once upon a time not so long ago, insurance companies were mutual benefit companies. The shareholders were the ratepayers and the company’s fiduciary duty flowed to the same individuals. If the company overpriced its insurance, the ratepayers got a rebate. If it underpriced, the ratepayers got a capital call.

When insurance companies were allowed to become publicly traded, the fiduciary obligation to the ratepayer vanished. Now, the company did better the worse it treated its ratepayers. But because US taxpayers refuse to allow the un- and under-insured to die in public parks due to an inability to pay for treatment, we get this collosally screwed up system where private health insurers dump their sick patients on the taxpayer while paying dividends to shareholders.

A good libertarian like yourself should be familiar with the concept of externalities. Read Ezra Klein’s series on how other industrialized countries are achieving similar or better health care results with less money, and let’s then talk about the appropriate regulatory environment for health insurers.
 
Written By: Francis
URL: http://
So - who’s going to pay the bonds off Francis?
Where’s that capital going to come from?
 
Written By: looker
URL: http://
my usual response to parades of horribles is to say that we can cross that bridge when we get there. Samuelson’s graphic is fundamentally dishonest, because it fails to recognize the increase in the wealth of the country.
What’s fundamentally dishonest is the presumption that because the country is wealthy that others have a claim to the wealth simply because they live here.

And that is your basic assumption. The graphs merely point out where that has gotten us when it comes to government spending. They also point to an completely different focus for government. Now you may find that to be a wonderful thing, but it shouldn’t at all surprise you that others don’t.
As to the problems with Medicare/Medicaid, once upon a time not so long ago, insurance companies were mutual benefit companies. The shareholders were the ratepayers and the company’s fiduciary duty flowed to the same individuals. If the company overpriced its insurance, the ratepayers got a rebate. If it underpriced, the ratepayers got a capital call.

When insurance companies were allowed to become publicly traded, the fiduciary obligation to the ratepayer vanished. Now, the company did better the worse it treated its ratepayers. But because US taxpayers refuse to allow the un- and under-insured to die in public parks due to an inability to pay for treatment, we get this collosally screwed up system where private health insurers dump their sick patients on the taxpayer while paying dividends to shareholders.
Then do precisely what Samuelson says ... call it what it is (a welfare program) and treat it as such. What that would mean, however, is not taking Medicare taxes out of pay because, as would be obvious, not everyone would be eligible for such a program.

That would ignite an entirely different debate and different approach than something universally applied by age whether the person really needs it or not.

But no one, and I mean no one, yourself included, is ready to do that ... and that is Samuelson’s point. Instead we continue down the road to financial ruin lined with bleeding heart appeals which, in the end, will do us all in.
A good libertarian like yourself should be familiar with the concept of externalities. Read Ezra Klein’s series on how other industrialized countries are achieving similar or better health care results with less money, and let’s then talk about the appropriate regulatory environment for health insurers.
I’ve read Ezra’s stuff and disagree because Ezra ignores the fact that many of those supposed savings (i.e. less money) are hidden elsewhere (mostly in government subsidies) and anyone with even a passing knowledge of economics knows that. One of his favorite examples of "good" health care is the VA system. Ever been in a VA hospital, Francis? Even a cursory glance at the system and very basic reasearch reveals a system in which health care is severely rationed to a select audience.

One of the myths of the VA system, for instance, is that they’ve "successfully negotiated with drug companies" for lower prices. Yes, for no more than 1,000 generic drugs. If you don’t take one of those 1,000 generics, you’re out of luck. Medicare is talking about 4,000 drugs and fewer than half are generics. Different context altogether, but you wouldn’t know it by the claims out there.

So as a ’good libertarian’ please excuse me if I don’t by your glib assurances that everything will be alright and that we can afford these entitlements forever because, you see, IOUs equal cash and the piper will never have to be paid.

That’s not my experience in the world in which I live.
 
Written By: McQ
URL: http://www.qando.net/blog
Then do precisely what Samuelson says ... call it what it is (a welfare program) and treat it as such. What that would mean, however, is not taking Medicare taxes out of pay because, as would be obvious, not everyone would be eligible for such a program.

"It" in this case is Medicare / Medicaid. I absolutely agree that these programs should be funded out of general revenues and that those trust funds should be dissolved.

I continue to think that the manner in which health care is provided in this country is nuts. Employer-based health care discourages entrepreneurship. Emergency rooms as a primary care system is incredibly expensive to the taxpayer, inefficient and unfair to those who really need it. (like the time it took me about five hours to see a doctor, get an x-ray and get meds after dislocating my pinky in a car crash.) Taxpayers in foreign industrial countries are not paying their fair share of drug development costs. 40+ million people deal with the stress of not knowing if they’re going to be wiped out financially because they cannot get insurance. Each state establishes different criteria for insurance policies, which must raise the cost of underwriting by billions.

i have no glib assurances about billions of dollars available in savings. but there really is no reason to continue with the relics of a postwar system that no longer reflects how americans work and live.

There certainly are people who believe that corporations are evil and health care insurers are a special kind of evil. I don’t. But I also know just enough about the history of corporate law to know that insurers have historically been one of the most regulated industries because they are needed only when things go wrong. So governments have been interested for a very long time in overseeing insurance company capital requirements, underwriting standards, treatment of policyholders and the like.

I don’t believe you can get anywhere near 50% of the vote for an unregulated health care insurance market and for wiping out M/M. I think you could probably get 50% of the vote for a system of federally chartered not-for-profit corporations, in the Fannie Mae mode, in which current recipients of M/M get subsidized.

cheers.

(btw, the bit about the Liberal Blog Commenter Offensensitivity Manual was my feeble attempt showing I have a sense of humor even when I’m called a fool with his head in LaLaLand.)
 
Written By: Francis
URL: http://
"Holding the size of the two pie charts constant is the kind of gross distortion that leads to the old saying about 3 kinds of lies."

Perhaps you can tell us what the size of the pie chart has to do with the relative size of the slices, which is, of course, the method used to convey information.


" Now, the company did better the worse it treated its ratepayers"

Ever hear of a MUTUAL insurance company? Try your yellow pages.
 
Written By: timactual
URL: http://

 
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