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June 17, 2009

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The policymakers who realize our current health system is already twice as costly as the world's next-most-expensive, yet still growing unsustainably, and have proposed a plan that will ultimately fix it the same way every other country has, aren't the grownups?

I'm confused.

The potential for future savings with a meaningful public healthcare option is enormous. For example, getting rid of the Medicare part D boondoggle, which certainly isn't being scored by the CBO. Whether they will be realized or whether the Republicans will run around like toddlers screaming about rationing is another question.

Aren't we already spending lots of money on health care, whether publicly or privately? It's all coming out of the same economy. It seems to me that the real question is whether overall spending on health care goes up or down relative to what it would otherwise be if we didn't expand public options. Might public health insurance be a stimulus for private industry, particularly smaller businesses, resulting in greater tax revenues in the future? I think we're at the point where public health insurance is something we have to do, so it's a matter of doing right and having an effective policy, unless there's some better alternative.

The potential for future savings with a meaningful public healthcare option is enormous. For example, getting rid of the Medicare part D boondoggle, which certainly isn't being scored by the CBO. Whether they will be realized or whether the Republicans will run around like toddlers screaming about rationing is another question.

Show me the numbers. And explain what, if anything, the Health Choices Act is going do to answer the criticisms lodged against Medicare Part D, which I agree is a boondogle.

Yeah. Grown-ups would just declare socialized healthcare was necessary, and begin to implement it, rather than putzing around the insurance companies that have already rotted your healthcare system.

Now, I recognize you may not agree with me that the US needs socialized health care to fix your ugly system, but the problem with your post isn't the ugly graph with the faked-up figures, Von: it's that you don't seem to have any ideas.

Not a one. Not a single, tiny, little notion.

You just want the grown-ups to step in and fix it, but you don't seem to have any idea how they'll do that... so I guess by this you're declaring yourself to be one of the children.

It's past your bedtime, Von. Nighty-night.

This business of charting the deficit is a little questionable. After all, a balanced budget would still involve a lot of spending. Why is that spending somehow immune from being held responsible for the deficit? Surely the defense budget, incluidng the Iraq war, and interest on the debt, for example, ought to be considered as contributing to the deficit.

A trillion dollars over ten years is certainly a lot of money, but on an annual basis it's less than we spent on Iraq, and is much less than the true total costs of the war.

And of course the CBO figure is necessarily

Aren't we already spending lots of money on health care, whether publicly or privately? It's all coming out of the same economy.

Sure. But it's all GOING INTO the same economy as well. Let's remember that our current "health care spending" pays hospital janitors, health insurance CEOs, and even the actors in boner-pill commercials, as well as doctors and nurses.

"Health care spending" is INCOME to some people. For some of those, any reform that gets us to a more "efficient" system means loss of income. For some of those, the income they stand to lose is in the form of profits, which are infinitely sweeter than wages, and therefore worth fighting for ferociously. Even with silly slogans like "socialized medicine".

--TP

Excellent insight, Bernard. Interestingly, this is just as precisely true of the "Bush deficit" that I seem to recall you were mad about a few days ago . . .

Apologies . . . that sounded snottier than I meant it to.

Aren't we already spending lots of money on health care, whether publicly or privately? It's all coming out of the same economy.

That's of course true in a coarse sense, Hairshirt. But it doesn't address the issue I raise, which is that having government incur these expenses will result in unsustainable deficits (absent a tax increase or other spending cuts, of course).

Tony P. also raises a good point, although I note that the taxes we pay are also, in a very general sense, income to certain people -- people who work for the government.

"The policymakers who realize our current health system is already twice as costly as the world's next-most-expensive, yet still growing unsustainably, and have proposed a plan that will ultimately fix it the same way every other country has, aren't the grownups?"

I know this sounds like I'm tooting the horn of my own article, but this still isn't being dealt with if you are saying things like that. The US government already spends enough money to pay for UK or Canadian universal health systems here. Yet it only covers about 27% of the population. It seems like wishful thinking to believe that expanding it will suddenly fix the out of control spending, when the evidence suggests that the US Government is already spending poorly. (And the private sphere is too, so this isn't a general anti-government screed). Until we are willing to figure out why government spending is already failing so badly compared to other countries, I don't see why the assertion that expanding it will save money should be given any weight.

I'm off to a meeting and won't be at the computer again until after 10:30, but will respond then if need be. This post is deceptive and dishonest, as are all the Republican responses to health care proposals up to now.

Read this post to understand the games being played with CBO scoring.

Read this one to understand the games being played by Democrats. They claim they're holding the public option language off as an amendment to be offered once the bill is on the floor. Who do you think they're hiding the specifics from -- the big scary Republicans, when it's already clear we can and should pass health care with 51 votes in the Senate, or YOU?

Read here to do something about it.

I'm having double bubble overload here.

I'll just add, that "grown-ups" are a hypothetical, wishful thinking term to describe just what group of mythical beings? Anyhow, this group of people would indeed institute health care for everyone, including the non-web-logging twitterati crowd. I know, I know.

I note that the taxes we pay are also, in a very general sense, income to certain people -- people who work for the government.

A few things about this:
1) Government pay is reputed to be rather low.
2) Even if it isn't, everybody has to make a living.
3) Government pays wages to its own employees. Its contractors pay wages to theirs, too, but generally get to keep a profit for themselves. Would you prefer government to pay fewer people wages, or fewer contractors profits? Pick one:)

BTW, why is devoting 15% of GDP to "government", or "health care", especially worse from a macroeconomic perspective, than devoting 15% to "entertainment" or "software"?

--TP

Nell, the interesting thing about the Kos Diary you link (which in turn links Ezra Klein) is that it re-enforces the view that the complete bill will result in larger, not smaller, deficits. Which is my concern. (The Kos Diarist and Erza are complaining because they claim that a complete bill will have greater coverage -- i.e., the current CBO report makes the incomplete bill look both expensive and stupid, as opposed to just expensive.)

Von: Which is my concern.

You're a kid: let the grown-ups talk. You're self-acknowledged as not one of the adults in this conversation.

Excellent insight, Bernard. Interestingly, this is just as precisely true of the "Bush deficit" that I seem to recall you were mad about a few days ago . . .

Thanks Megan. Nice to know you follow my comments carefully.

You are certainly correct that the Bush deficits (quotation marks seem unjustified) were due to a combination of deliberate Bush policies - both tax and spending - and previously more or less committed spending. I happen to think many of those Bush policies were unwise, foolish even, so the deficits made me unhappy. That's true.

The Republicans were irresponsible when they were in power; children, really, and none-too-bright ones at that. But we are still awaiting the arrival of the grown-ups.

The people cleaning up the kiddie vomit are not magically responsible for it. Let's imagine having this discussion in 2000, or 1994. That is, it's only a budget-busting boondoggle when placed atop the precarious pile of tax cuts and foolish spending of the last eight years.

Also, your figures make Obama responsible for the money he's spending to resuscitate up the economy Bush put into a coma, and service the debt Bush incurred. Not sure why you'd think that this is the best way to assign responsibility.
[Yes, the CBO figures break things out by presidential terms, but the CBO isn't pointing fingers. You are.]

Yeah, it's gonna be expensive. But healthcare savings of just 1.5% a year, whomever's ox is gored to get that 1.5%, adds up to $2 Trillion in healthcare savings over the same decade.

...having government incur these expenses will result in unsustainable deficits (absent a tax increase or other spending cuts, of course).

This has been covered, but the same can be said of every government expenditure once you've gone into deficit. So, von, you're sort of ignoring the point that I made about policy being effective in reducing costs relative to what they would otherwise be. I have no idea how effective this proposal would be, but I don't see anything that tells me that you do either. It seems to me that you're generally opposed to this type of expenditure because of its effect on deficits, and that this opposition is somehow (unexplainedly) distinct from your opinions about other expenditures. [I don't like deficits either, but I guess that puts us both at odds with the (previous to Obama presidency) "deficits don't matter" crowd.]

Sebastian keeps bringing up the fact that the US government already spends as much as the UK on health care. Two points:

1) The UK spends, I believe, the lowest amount on health care of any of the industrialized nations. Since they spend so little, they have more issues with waiting lines, etc., than many other systems. Using the lowest spending country as a barometer is a bit like making a Hall of Fame case for Cal Ripken by noting he's better than Phil Rizzuto.

2) More to the point, Obama is pushing proposals to cut spending in Medicare by improving efficiencies. Ezra Klein had a nice post about this:

http://voices.washingtonpost.com/ezra-klein/2009/06/how_obama_plans_to_reform_medi.html

The Obama administration is coupling extended coverage with cutting costs.

Finally, von is calling the proposed health care spending deficit spending, but Obama has also proposed raising taxes to pay for the bill (limiting charitable deductions, limiting the health insurance deduction). Of course it is entirely possible Congress will not pass a bill to pay for increased government health care expenditures.

Until we are willing to figure out why government spending is already failing so badly compared to other countries

I've got a pretty good idea. Firstly, due to lifestyle differences rates of heart disease, diabetes, and other chronic, expensive-to-treat conditions are much higher in the U.S., particularly among those most likely to be covered by government healthcare - the poor and the elderly. Second, American doctors seem to order a great many more unnecessary medical tests and other procedures than their counterparts in other countries, though how much of that is out of fear of being sued and how much out of a desire for greater profits is difficult to suss out. Third, the U.S. spends disproportionately more on new drugs and other medical technologies, because we actually pay market prices or close for them, thus funding the vast majority of private medical research and subsidizing lower spending in other countries' systems.

I don't really see what the government can do to solve any of these problems, with the exception of overmedication.

What Von neglects to mention - in addition to the proposals for tax increases to devote to health-care reform, as noted by Bunk at 8:25 - is that the primary element of the Obama Budget Proposals category that is contributing to deficits in the bar graph (thanks for the graph, but dispense with the 3-D effects next time, would you please?) is extension of the Bush tax cuts.

Logically, then, Von should be calling to a return to 2000 tax rates.

I know this sounds like I'm tooting the horn of my own article, but this still isn't being dealt with if you are saying things like that. The US government already spends enough money to pay for UK or Canadian universal health systems here. Yet it only covers about 27% of the population. It seems like wishful thinking to believe that expanding it will suddenly fix the out of control spending, when the evidence suggests that the US Government is already spending poorly

So your belief is that the US government is incapable of, say, implementing the exact same system as the UK? Or Canada? Or France?

Or is your point that US citizens are somehow costlier to insure than, say, UK citizens?

I'm not sure what's unreasonable about saying "System X costs rougly Y per person. System Z, which we use, costs 2Y per person. Switching to system X would thus halve our costs, not account for transitionary costs".

You seem to feel this is an extraordinary statement. Why? Pretty much the entire first world gets better results for less money than us. What's so special about Americans that we can't use their systems and get the same general results?

Good, let's raise taxes then.

Healthcare is a personal issue for me in two ways, because I pay for my housekeeper's insurance, while I nearly lost my own last year (because of the Writers' Guild strike). So I feel like the current system is 1) incredibly expensive for employers while 2) potentially terrifying for employees. I'd pay good money to make both those problems go away.

Von, your "Obama deficit" series is starting to remind me more and more of Charles Bird's "We're winning in Iraq" series, right down to the copious, misleading graphs. So how long will it be before you follow Charles to the magic conservative fairyland that is RedState?

"So your belief is that the US government is incapable of, say, implementing the exact same system as the UK? Or Canada? Or France?"

Yes. At least without looking seriously at things like making large changes in what we put into end-of-life care.

And we should almost certainly do that, by the way. I'm just saying that if we pretend that the savings are going to come from saving administrative expenses, that we are going to be seriously disappointed. There are very noticeable differences that don't involve drug prices or administrative costs, and if we had a good handle on them, Medicare would be a near universal program for its cost rather than covering less than a quarter of citizens.

So how long will it be before you follow Charles to the magic conservative fairyland that is RedState?

I think it took Charles six or seven Friedman Units, so I don't suppose it will take Von any less.

von, you've yet to address the fact that deficits aren't bad, per se, it depends what they're spent on. For example, wasting money by invading a country that's never been a threat to us, versus spending less money on providing health care for everyone.

But I've got an idea. Why don't we just stop pussyfooting around, and provide a real public option, that will charge people exactly what they're paying currently for insurance to start with, while we're getting it set up, but won't screw around with denying coverage and that sort of nonsense? We could even call that charge a "tax", just to piss Republicans off more.

Or just nationalize the health insurance companies, or at the very least try their executives for fraud and the suffering and death they've caused by fighting people over their health care. I'll be generous. A year in jail for each of them for each person who's died because the company needed to make a profit. Sound fair?

Von, your "Obama deficit" series is starting to remind me more and more of Charles Bird's "We're winning in Iraq" series, right down to the copious, misleading graphs. So how long will it be before you follow Charles to the magic conservative fairyland that is RedState?

I'll happily take the comparison, given that Iraq is decidedly better now than it was when Charles started his process.

I'm also somewhat shocked by the blase approach to the deficit. The CBO baselines include an expiration of the Bush tax cuts. I thought that the Bush deficits were too high at the time; these deficits are higher by multiples.

And, yes, I opposed the Bush tax cuts; and, yes, I'm fine with returning to 2000 levels (which we largely already are); and, yes, I'm going to continue this series. Because it's important.

(We'll assess the impact of any proposed tax increases to offset these payments as soon as they are scored by the CBO.)

Also, your figures make Obama responsible for the money he's spending to resuscitate up the economy Bush put into a coma,

This is important if we're going to assign blame. There was certainly going to be some kind of stimulus program, McCain or Obama, (or von, for that matter). To pin the expense on Obama as an example of fiscal recklessness is not reasonable.

von, do you have any posts from pre-2005 where you opposed the Bush tax cuts? The people who were opposed to tax cuts/the invasion of Iraq/etc also attended Woodstock.

I'm sorry, but you really have done little to bolster your credibility in this series; quite the opposite. And here, for example, you're using a CBO-scored piece of legislation that is known to be incomplete:

The CBO's findings, however, are for an incomplete piece of legislation, making the cost-per-coverage estimates much worse than they will ultimately be. Republicans on the committee knew this, according to Democrats. But they pushed for the bill to be studied by the CBO now. And when poor results came back, they ran with them.

Somehow, you forgot to include that ;-)

Bernard, I do; I valued you as a commenter, and miss you now that you're gone. But you're pretty much conceding that you don't care about the deficit. Okay, but are you now willing to admit that anything you said about the Bush deficits was a purely opportunistic argument because you didn't like what he spent it on?

Scent, my very first sentence is perfectly clear that this bill is the "opening salvo." Also, please include the link when you purport to quote something.

Sigh. Deficit spending to give a tax cut to the wealthy and to finance unnecessary wars is a bad thing.

Deficit spending to prompt an economic recovery is a good thing . . . and this is bog-standard Keynesian economics. Moreover, Keynesian deficits are necessary because Bush fiddled while Rome burned, because Bush ran a deficit(among other things.) To try to feign ignorance of this basic point and to try to play some sort of gotcha! is simply not credible.

von, you've yet to address the fact that deficits aren't bad, per se, it depends what they're spent on. For example, wasting money by invading a country that's never been a threat to us, versus spending less money on providing health care for everyone.

Nate, whether a deficit is bad or not depends on a number of factors. For example, the deficits that we ran during World War II were not "bad" by any stretch. But all deficits, no matter how noble the intent, have negative consequences. Whether those negative consequences are worth the expenditure -- i.e., whether the deficit is bad -- of course depends.

Nate, whether a deficit is bad or not depends on a number of factors. For example, the deficits that we ran during World War II were not "bad" by any stretch. But all deficits, no matter how noble the intent, have negative consequences. Whether those negative consequences are worth the expenditure -- i.e., whether the deficit is bad -- of course depends.

Which is not at all what you're saying in the main post. Your entire series has been "Obama's making a huge deficit! OHNOES!" Nothing in ANY of the posts has reflected any consideration of WHAT the money is being spent on, addressed if that money's worth spending or not, or even suggested how the deficit could/should be reduced, except for boondoggles like "means testing" Social Security (which would require an enormous bureaucracy, as well as the whole Trojan Horse to kill Social Security angle).

Indeed, the only point seems to be "The Democrats are spending lots of money! Bad!"

Scent, my very first sentence is perfectly clear that this bill is the "opening salvo." Also, please include the link when you purport to quote something.

Posted by: von

So, we are agreed that this is not the final bill? Then why did you make a graph using those assumptions when you know that they're not true? That's simply wrong. I could just as easily have made a graph with " . . . and then a medical breakthrough occurs, driving all costs to zero.)

You seem to have a problem with actually providing real data.

My criticism of long term deficits is the same I have of long term rollover balances on credit cards: it is playing with fire to permanently divorce in your mind the act of spending from the act of paying for it.

And heaven knows I've made the mistake myself.

I don't know where you get the idea, Von, that we largely are already back at 2000 tax rates. The JGTRRA income tax rates remain in effect.

The CBO analysis you link to shows a revenue impact from EGTRRA and JGTRRA of $220B for 2015. AMT fix - which is related to the tax cut acts - adds $40B.

In other words, extension of the Bush tax cuts is appropriately regarded as the largest single component of the projected out-year deficits.

SoV, you're not keeping up with the discussion.

Steve,

1. The AMT fixed has been long proposed and considered, but is not a part of the Bush tax cuts.

2. The EGTRRA and JGTRRA are both still scheduled to sunset by 2011. To the extent that they continue to have an effect upon the deficit, they are accounted for in both graphs as part of the CBO baselines. No one is disputing that they continue to contribute to future deficits.

Von-

Revising the AMT has become a much larger issue because the Bush tax cuts led to greatly expanded applicability of the AMT. If the tax cuts are extended, we should expect AMT modifications to accompany it, as has happened each year. As a practical matter, if not a legal one, the cost of the AMT fix is part of the Bush tax cuts, as they are likely to be extended, and I suggested nothing more.

I don't claim that anyone disputes that the tax cuts contribute to deficits. However, by saying that tax rates have nearly returned to 2000 levels, you are suggesting that this impact is small. I am arguing that this impact is large.

SoV, you're not keeping up with the discussion.

Sigh. Rather than simply telling, why don't you show, to paraphrase yourself to me up above?

You know, not using a CBO-scored proposal because it's incomplete seems pretty reasonable. If you've got information to the contrary that this is going to be pretty much it, show it. As it is, to say that you've been unpersuasive is putting it pretty mildly.

Are you under the impression that anyone has to persuade you that you're wrong in what you write? If so, please disabuse yourself of the notion. It's pretty clear for what are fundamental and fundamentally nonpartisan reasons that your 'analysis' is bunk.

Nice chart. Now do one showing how "Obama's defense budget" will dwarf the new health care deficit spending over the same period.

and, yes, I'm going to continue this series. Because it's important.

Yes, now that there's a Democrat in the White House, budget deficits are important.

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