This post is not a comprehensive review of all declared candidates; rather, it is of the six major candidates who remain: Gingrich, Huntsman, Paul, Perry, Romney, and Santorum. I will comment at least briefly on each, but I may as well make this clear up front--I have considered myself a Perry supporter since he jumped in, and intend to continue to support him as long as he is a candidate. I will make my reasons for this clear in my comments. I will not say I endorse Perry, because I don't have sufficient influence for it to matter, but if I did, I would.
Huntsman: I have not conversed with any registered Republican who has any enthusiasm for him. I've heard plenty of avowed liberals tout him as the best candidate in the field, though. I do not think Huntsman is a particularly good GOP candidate, though his record is fairly decent and he has been blasted unfairly for having been Obama's choice for ambassador for China. The man has no real charisma for me, and I have yet to hear him articulate a meaningful vision for how he will get this country back in order. To me, he is an also-ran and should drop out.
Paul: I believe he is dangerously naive in his views of foreign policy. As I understand him, he would overturn the entirety of American foreign policy going back to Monroe, enacting an isolationist doctrine. I cannot support this philosophy even in the abstract, and definitely not when taking the particulars of the current world political environment into consideration. Given that I believe in a moral authority and duty to remain a superpower and force for good in the world, this disqualifies Paul for me. There is also the questionable (to put it politely) views he shows towards Israel, the seeming lack of discomfort he feels with being supported by white supremicist groups, and the newsletters he claims to have no knowledge of despite his name appearing on them and the income he derived from them. I do appreciate many of his ideas to limit federal power and reform the domestic agenda, but being this is 2012 and not 1796, we need someone with plans for dealing with problems both domestic and foreign.
Gingrich: Newt has several problems. First, his personal life and scandals--the GOP does not get a free pass on dubious moral behavior the way a Democratic candidate does. Second, his legislative history is somewhat checkered--he failed to push his advantage as Speaker as far as he should have. He did help push through meaningful reform of welfare, and there were budget surpluses under his leadership, but in both cases he likely could have extracted even more from Clinton. His immigration policy is awfully lenient and sounds a lot like amnesty to me, without solving the border problem first. All this aside, however, he understands the need for a pro-active foreign policy, he has some ideas for attacking entitlements (though spit the bit with attacking Paul Ryan's plan), and he's not afraid to call out Obama or the media for their mistakes. I can support him to some degree, but I'm not convinced enough of the American public would, especially with months of non-stop media attacks.
Santorum: Excellent social credentials, but weak on fiscal matters. He was destroyed in his home state in his last election, which doesn't speak well for his chances nationally. He has shown new viability in the past month, but it is not clear to me he can win the primary, yet alone the national election. I am not enough of an accountant to determine if his tax policies will work or not, and while I am ignorant of his specific plans for entitlement reform; his record is one of someone who will make changes, but is also unwilling to cause too much pain as he is compassionate in the modern political sense. I can support him more strongly than Gingrich, but he would not be my first choice.
Romney: The perpetual candidate, Mitt is complex. Despite campaigning for essentially 6 years, he cannot crack even 30% support in his own party. There is little doubt that he has benefitted from the large number of candidates, dividing the opposition against him. He was quite successful in the business world before becoming a politician, however it is questionable if that experience is as useful as it might have been had he built a company from the ground up instead of gutting failing companies and selling the parts for profit. True, he has turned some companies around, but it's not as if he can sell off a third of the states to make the rest of the country more economically sound. His policies and views seem quite opportunistic and prone to change; but the image he projects is one who does so out of expediency rather than a genuine conversion to a new point of view. He is the moderate Republican equivalent of John Kerry, only without the unseembly sanctimonious attitude. He has shown an awfully thin skin when challenged or called out, whether the charges are legitimate or not. Most damning of all is the gruesome abomination known as Romneycare. If Pawlenty had used the opportunity in the early debates to press the attack on Obamneycare, he might have crippled Romney's campaign months ago. Instead, if nominated Romney will automatically cede away the ability to attack Obama's signature legislation, an incredibly unpopular and ill-conceived bundle of statutes that, unlike the economy (which Obama does own now, although quite a few of the problems predate him), could be easily and wholly hung around Obama's neck without reservation by almost any other candidate. I am not convinced that the "anyone but Obama" mandate is strong enough to rally sufficient voters to win an election, and if Romney's expected electability is a myth, he is at best a fall-back candidate instead of the proper standard-bearer.
Perry: A victim of multiple gaffes and unrealistic expectations when he first entered the campaign. It is questionable if the strains of recent surgery and the wildfire outbreak in Texas distracted him and contributed to his poor early performances. However, poor they were, and he did not rally quickly. Whether this was lack of preparing, or unfamiliarity with how things changed on a national scale, is also debatable, but the reality is it hurt him severely. He also harps on quixotic issues at times, like the part-time Congress--a plan I support, but hardly a major talking point at this stage in the game. By most accounts he has strengthened his debate performances recently, though it may be too late. In terms of policies, the two big knocks against him are Gardasil and the Texas Dream Act. From my perspective, Gardasil is a non-issue, and Perry has expressed he would change his approach if he had it to do over. The Texas Dream Act on the surface seems antithetical to border security, but it reflects the reality that the federal government did not secure the border, and contributing illegal aliens are better than those who simply absorb resources. On the other hand, Perry did use significant state resources to try to limit illegal immigration, and has articulated a realistic, workable plan to protect the border instead of the symbolic but mostly ineffective physical fence. He has made calls to actually reduce the size of the government, which only Reagan had ever done before. He has proposed simplification of the tax code, slicing the budget, and has a firm grasp of the ugly nature of world affairs and the need for an active role in them. Perry's record in Texas is one of creating jobs, of fighting tough but fair with the opposition and winning support when needed, and of winning charged, tightly contested elections. He is not the perfect candidate, but Ronald Reagan is not rising from the grave to run for a third term, and Perry is the closest thing to the Gipper that we will see this election cycle. That is why I support him.
Sunday, January 8, 2012
Monday, November 21, 2011
Debt Supercommittee Failure and the Blame Game
(Note--this is a rapid reaction to Obama's press conference on November 21 regarding the lack of a budget deal from Congress. It will be shorter and less sourced than other posts typically are, and may well have revisions subsequently.)
Obama's brief (about 4 minute) press conference this afternoon had only one purpose--for him to use his bully pulpit as President to get out his approved message, namely that the failure for a supercommittee solution to the mandated $1.2 trillion cuts is all the Republicans' fault.
However, the truth of the matter is that both sides showed an unwillingness to sacrifice certain sacred cows, though the intransigence is greater on the left. The Republicans did include a proposal for a tax increase of as much as $300 billion dollars, which is a major concession on their part. The Democrats on the committee, to my knowledge, did not advance or approve of any idea that included a similar amount of cuts to entitlement programs.
As detailed on this blog in a prior post, the current budget problem is one of spending, not revenue. Tax, tax, and tax some more, but there is not sufficient income by the top 1% (who apparently have trees that really do grow unlimited sums of money, according to the continued Democratic delusion that taxing the rich will provide a bottomless supply of cash for their programs), even if confiscated in toto, that can solve the deficit problem. There would have to be significant tax hikes on the middle class as well to support the current budget projections, yet alone actually decrease the debt.
Make no mistake, Obama will use this as a campaign talking point next year. Congress, especially the Republicans, blocked his earnest efforts to fix this problem. This is crap, but the media will dutifully report it as gospel truth. The key is to spread the word that taxes cannot solve this problem, that an axe must be taken to the federal budget, and that Republican control of one half of Congress does not excuse the utter failures of Obama and the Democrats who control the other half of Congress, not to mention control of both branches of government in 2009-10, and succeeded only in digging a bigger financial hole.
Obama's brief (about 4 minute) press conference this afternoon had only one purpose--for him to use his bully pulpit as President to get out his approved message, namely that the failure for a supercommittee solution to the mandated $1.2 trillion cuts is all the Republicans' fault.
However, the truth of the matter is that both sides showed an unwillingness to sacrifice certain sacred cows, though the intransigence is greater on the left. The Republicans did include a proposal for a tax increase of as much as $300 billion dollars, which is a major concession on their part. The Democrats on the committee, to my knowledge, did not advance or approve of any idea that included a similar amount of cuts to entitlement programs.
As detailed on this blog in a prior post, the current budget problem is one of spending, not revenue. Tax, tax, and tax some more, but there is not sufficient income by the top 1% (who apparently have trees that really do grow unlimited sums of money, according to the continued Democratic delusion that taxing the rich will provide a bottomless supply of cash for their programs), even if confiscated in toto, that can solve the deficit problem. There would have to be significant tax hikes on the middle class as well to support the current budget projections, yet alone actually decrease the debt.
Make no mistake, Obama will use this as a campaign talking point next year. Congress, especially the Republicans, blocked his earnest efforts to fix this problem. This is crap, but the media will dutifully report it as gospel truth. The key is to spread the word that taxes cannot solve this problem, that an axe must be taken to the federal budget, and that Republican control of one half of Congress does not excuse the utter failures of Obama and the Democrats who control the other half of Congress, not to mention control of both branches of government in 2009-10, and succeeded only in digging a bigger financial hole.
Saturday, October 1, 2011
High Crimes And Misdemeanors
While much of the talk among conservatives right now seems to resemble a circular firing squad, with picking at candidates' flaws with occasional breaks to note just how terrible the economy is, it is easy to forget what should be daily headline news--the scandals of the current administration.
The most recent, and hottest topic, has been Solyndra, et al. This is certainly a scandal, as the appearance is that those who donated to Obama and the Democratic Party received preferential treatment in both having the loan applications approved and in being the first to have loans repaid when the companies filed for bankruptcy. This is not a particularly novel scandal, and favortism for donors is as old as the political system, and this actually rates comparatively low on the scandal scale for President Obama. It looks bad, but is more a matter of creativity in policy and law than criminal behavior.
Next is the ATF clusterjob, made up of Fast and Furious and Gunwalker. On a scale of fixing a traffic ticket to selling the nuclear codes to the highest bidder, this ranks right about the same as Iran/Contra--I think. There is a lot about F&F and GW that we just don't know yet. Was tracking the guns the actual plan, and if so why did it not happen? The existence of a weapons pipeline was not serious doubted, but taken as a given. Similarly, the government already knew who the straw buyers were, so it was not an attempt to identify them. A federal agent is dead, and an as yet unknown number of Mexican civilians have also been killed, with weapons from this operation. The whole operation could be reasonably argued to be an act of war against Mexico. Reagan was not impeached for Iran/Contra, but there was some serious consideration given to the idea at the time.
Finally, we come to the forgotten scandal, at least from where I stand as I have not seen any serious coverage of it in months--the conflict in Libya. Now, there is serious debate as to whether or not the War Powers Resolution is constitutional or not, but it unless and until it is in fact deemed unconstitutional or repealed, it is the law of the land. Obama did not keep to the letter of the law, or even the spirit of it, during combat operatoins in Libya. Obama has even possibly violated the Separation of Powers enumerated in the Constitution, which is almost certainly an impeachable offense. Short of committing treason, it is hard to imagine an action by the President that is more contrary to the Constitution and Rule of Law than claiming the powers of another branch of government for his own.
Now, from a practical standpoint, filing article of impeachment against President Obama may be virtually meaningless, especially if he fails to win re-election. However, the symbolism of it is important. Whether or not he were to be found guilty of high crimes and misdemeanors by the Senate, the articles should be filed by the House to show remind everyone that no one, not even the president, is above the law.
The most recent, and hottest topic, has been Solyndra, et al. This is certainly a scandal, as the appearance is that those who donated to Obama and the Democratic Party received preferential treatment in both having the loan applications approved and in being the first to have loans repaid when the companies filed for bankruptcy. This is not a particularly novel scandal, and favortism for donors is as old as the political system, and this actually rates comparatively low on the scandal scale for President Obama. It looks bad, but is more a matter of creativity in policy and law than criminal behavior.
Next is the ATF clusterjob, made up of Fast and Furious and Gunwalker. On a scale of fixing a traffic ticket to selling the nuclear codes to the highest bidder, this ranks right about the same as Iran/Contra--I think. There is a lot about F&F and GW that we just don't know yet. Was tracking the guns the actual plan, and if so why did it not happen? The existence of a weapons pipeline was not serious doubted, but taken as a given. Similarly, the government already knew who the straw buyers were, so it was not an attempt to identify them. A federal agent is dead, and an as yet unknown number of Mexican civilians have also been killed, with weapons from this operation. The whole operation could be reasonably argued to be an act of war against Mexico. Reagan was not impeached for Iran/Contra, but there was some serious consideration given to the idea at the time.
Finally, we come to the forgotten scandal, at least from where I stand as I have not seen any serious coverage of it in months--the conflict in Libya. Now, there is serious debate as to whether or not the War Powers Resolution is constitutional or not, but it unless and until it is in fact deemed unconstitutional or repealed, it is the law of the land. Obama did not keep to the letter of the law, or even the spirit of it, during combat operatoins in Libya. Obama has even possibly violated the Separation of Powers enumerated in the Constitution, which is almost certainly an impeachable offense. Short of committing treason, it is hard to imagine an action by the President that is more contrary to the Constitution and Rule of Law than claiming the powers of another branch of government for his own.
Now, from a practical standpoint, filing article of impeachment against President Obama may be virtually meaningless, especially if he fails to win re-election. However, the symbolism of it is important. Whether or not he were to be found guilty of high crimes and misdemeanors by the Senate, the articles should be filed by the House to show remind everyone that no one, not even the president, is above the law.
Tuesday, September 6, 2011
Cut The Fat--Why Budget Cuts, Not Higher Taxes, Must Be Used To Balance The Budget
Numbers and figures here.
The money quote (pun intended): Finally, to put everything in perspective, think about what would need to be done to erase the federal deficit this year: After everyone making more than $200,000/year has paid taxes, the IRS would need to take every single penny of disposable income they have left. Such an act would raise approximately $1.53 trillion.
That's right--to save the current nanny-state model, every person making $200K or more a year would have to turn over every cent of that income, to keep us revenue neutral! That's on top of all the taxes already collected on everyone making less than $200K/year. Putting every high-earning individual on welfare in order to support welfare is, well, insane. It makes sense in a pure communist or pure socialist society, though practically speaking those societies do not function.
The money quote (pun intended): Finally, to put everything in perspective, think about what would need to be done to erase the federal deficit this year: After everyone making more than $200,000/year has paid taxes, the IRS would need to take every single penny of disposable income they have left. Such an act would raise approximately $1.53 trillion.
That's right--to save the current nanny-state model, every person making $200K or more a year would have to turn over every cent of that income, to keep us revenue neutral! That's on top of all the taxes already collected on everyone making less than $200K/year. Putting every high-earning individual on welfare in order to support welfare is, well, insane. It makes sense in a pure communist or pure socialist society, though practically speaking those societies do not function.
Saturday, August 6, 2011
Harbinger Of Great Depression 2.0?
Full story here: http://money.cnn.com/2011/08/05/news/economy/downgrade_rumors/index.htm?hpt=hp_t1
Before anyone packs up all the ammo and moonshine they can carry and heads for the hills, let's take a moment to think all this through.
First, yes, this is unprecedented in American history. Not during the Great Depression, not during stagflation in the 70s, not under any other recession in our history have we lost our AAA bond rating. This is not a good thing. It demonstrates the complete and utter failure of government to manage the world's largest economy, and the nearly unimaginable sums of money it generates.
Second, this is a klaxon call to action to fix the problems with government spending. Nonwithstanding how banal it is to talk about the meaning of the Chinese character for crisis, this is the time for reform. Lots of people may have to eat their peas, but that's hardly the worst that could happen.
Third, let's look at the Great Depression with perspective. It was an awful economy, to be sure, but the majority of Americans did not lose their homes, did not go hungry, and did go to work every day. History tells us that the current storm will likely last several years, but that prosperity will return after a time. We would all do well to remember that going forward.
Before anyone packs up all the ammo and moonshine they can carry and heads for the hills, let's take a moment to think all this through.
First, yes, this is unprecedented in American history. Not during the Great Depression, not during stagflation in the 70s, not under any other recession in our history have we lost our AAA bond rating. This is not a good thing. It demonstrates the complete and utter failure of government to manage the world's largest economy, and the nearly unimaginable sums of money it generates.
Second, this is a klaxon call to action to fix the problems with government spending. Nonwithstanding how banal it is to talk about the meaning of the Chinese character for crisis, this is the time for reform. Lots of people may have to eat their peas, but that's hardly the worst that could happen.
Third, let's look at the Great Depression with perspective. It was an awful economy, to be sure, but the majority of Americans did not lose their homes, did not go hungry, and did go to work every day. History tells us that the current storm will likely last several years, but that prosperity will return after a time. We would all do well to remember that going forward.
Thursday, August 4, 2011
Opinion On Program Cuts
There will be cuts of some sort to federal spending later this year. With each side having sacred cows (Defense and Medicare) slated for the sacrifical altar if the double secret super-duper commission cannot come to a consensus solution for trimming the budget, it is pretty safe to assume that almost everything else will be open for discussion, if not necessarily for cuts (Social Security being the obvious candidate to remain sacrosanct).
Disclaimer: I do not know the current outlays for various programs, so I will not be dealing with hard numbers.
Clearly, I am willing to trim most things in order to preserve Defense, but I'm not naive enough to think that there won't be cuts there as well. I'm also a big believer in grants and loans for education, and I would not going to cut that funding either if it can be avoided. Short term, obvious targets seem like the government programs which accomplish very little for the money spent--some of the more outlandish EPA enforcement issues, many agricultural and industrial subsidies, and all the redundant bureaucracies. Is there a reason why TSA has to be a separate entity from the DOT? How much money is saved by folding one department into the other, even if no one is actually let go? I'm wagering it makes for more than a rounding error and would be a mostly painless step for those employees.
Incidentally, I'm mildly upset by the change to the loan program in the debt compromise, to wit the loss of having a portion of federal loan interest being subsidized for grad students. The total amount of money available to grad students is unchanged, but the loans did just become a little more expensive in terms of repayment for those who take them. I have no idea what that program cost the federal government, but I'm betting it's a pittance compared to what needs to be slashed from total expenditures. Still, I did benefit from the program when I was in school, and I would like it to have stuck around for future students.
So, long term, where should the fat be cut out? As this columnist rightly pointed out, start with the biggest programs around. (H/t to AoS HQ where I originally saw this linked, long since disappeared from the sidebar there.) Until someone grabs the third rail of politics and holds on long enough to actually change its trajectory, this problem will continue. The age for full benefits for Social Security must be raised, and the benefits themselves probably should be cut. When the program was implemented, 1 in 7 people lived long enough that they reached the age for full benefits. Today, the average man will make it at least a decade past 65, and the average woman even longer, and if anything the average lifespan will only lengthen. I'm not suggesting that we cut Grandma off at the knees; there are ways to do this reasonably.
For example, preserve the current plan for everyone already retired or close to retirement, say 60 years or older. Do an across the board cut of benefits by some amount, let's say 10%, for anyone under the age of 60. Change the reitrement age for anyone currently under the age of 55, so that going forward it increases by one year every other year until the age is raised by 10 years. Finally, add in some means testing that scales based on reported income, so that the most well-off seniors do not receive as much, because frankly they don't need it.
Let's say this is approved sometime next year, but will start in 2015, government inertia being what it is (and makes it a little easier for me to do the math here). Anyone born before 1955 is grandfathered in to the current age/percentage benefits calculations. Anyone born before 1960 still gets full benefits (though those benefits are 10% less than previously) at age 65. In 2025 the retirement age goes to 66, in 2027 the age goes to 67, etc. So, for example, in 2035 the retirement age becomes 71, and anyone born before 1965 can get the full benefits. By the time 2043 rolls around, the retirement age is up to 75 for full benefits. One doesn't need to be an actuary to know that such a regime would save money. I also doubt such a plan could pass in the current political environment, probably an increase in age by 1 year every third year is more realistic, as well as an increase in the age to 70 for full benefits. But it would be interesting to see the CBO game some numbers for plans like this and see how much savings it creates.
Then again, with how horrible things look right now, candidates who run on platforms of gradual changes to entitlement programs and not altering the programs for those already enrolled in them may have a chance in 2012--and that's a mandate I'd like to see.
Disclaimer: I do not know the current outlays for various programs, so I will not be dealing with hard numbers.
Clearly, I am willing to trim most things in order to preserve Defense, but I'm not naive enough to think that there won't be cuts there as well. I'm also a big believer in grants and loans for education, and I would not going to cut that funding either if it can be avoided. Short term, obvious targets seem like the government programs which accomplish very little for the money spent--some of the more outlandish EPA enforcement issues, many agricultural and industrial subsidies, and all the redundant bureaucracies. Is there a reason why TSA has to be a separate entity from the DOT? How much money is saved by folding one department into the other, even if no one is actually let go? I'm wagering it makes for more than a rounding error and would be a mostly painless step for those employees.
Incidentally, I'm mildly upset by the change to the loan program in the debt compromise, to wit the loss of having a portion of federal loan interest being subsidized for grad students. The total amount of money available to grad students is unchanged, but the loans did just become a little more expensive in terms of repayment for those who take them. I have no idea what that program cost the federal government, but I'm betting it's a pittance compared to what needs to be slashed from total expenditures. Still, I did benefit from the program when I was in school, and I would like it to have stuck around for future students.
So, long term, where should the fat be cut out? As this columnist rightly pointed out, start with the biggest programs around. (H/t to AoS HQ where I originally saw this linked, long since disappeared from the sidebar there.) Until someone grabs the third rail of politics and holds on long enough to actually change its trajectory, this problem will continue. The age for full benefits for Social Security must be raised, and the benefits themselves probably should be cut. When the program was implemented, 1 in 7 people lived long enough that they reached the age for full benefits. Today, the average man will make it at least a decade past 65, and the average woman even longer, and if anything the average lifespan will only lengthen. I'm not suggesting that we cut Grandma off at the knees; there are ways to do this reasonably.
For example, preserve the current plan for everyone already retired or close to retirement, say 60 years or older. Do an across the board cut of benefits by some amount, let's say 10%, for anyone under the age of 60. Change the reitrement age for anyone currently under the age of 55, so that going forward it increases by one year every other year until the age is raised by 10 years. Finally, add in some means testing that scales based on reported income, so that the most well-off seniors do not receive as much, because frankly they don't need it.
Let's say this is approved sometime next year, but will start in 2015, government inertia being what it is (and makes it a little easier for me to do the math here). Anyone born before 1955 is grandfathered in to the current age/percentage benefits calculations. Anyone born before 1960 still gets full benefits (though those benefits are 10% less than previously) at age 65. In 2025 the retirement age goes to 66, in 2027 the age goes to 67, etc. So, for example, in 2035 the retirement age becomes 71, and anyone born before 1965 can get the full benefits. By the time 2043 rolls around, the retirement age is up to 75 for full benefits. One doesn't need to be an actuary to know that such a regime would save money. I also doubt such a plan could pass in the current political environment, probably an increase in age by 1 year every third year is more realistic, as well as an increase in the age to 70 for full benefits. But it would be interesting to see the CBO game some numbers for plans like this and see how much savings it creates.
Then again, with how horrible things look right now, candidates who run on platforms of gradual changes to entitlement programs and not altering the programs for those already enrolled in them may have a chance in 2012--and that's a mandate I'd like to see.
Friday, July 29, 2011
Debt Ceiling Debate
Balanced, bipartisan, fair, smart...these are some of the words President Obama used in his press conference today. Certainly, the president has not shown through his actions that he is interested in any of these things--he gives high-minded speeches, but they are only empty words until backed by action. Historically, countries in this sort of economic stall return to growth only with significant cuts in spending, not by increasing taxes. While the House (Republicans) has advanced numerous plans that have actually been voted on and passed, the Senate (Democrats) has been running in circles for the past few weeks trying to create a single plan, and the president hasn't put a single bloody idea to paper. Now, there can be debate over which of the House plans is the best option at this time, but the Senate and Oval Office combined have given not a single plan. If Obama wants a deal so badly, simply send the marching orders to the Democrats that they should pass Cut, Cap and Balance in the Senate.
As to Obama's biggest complaint with the current plans, namely that we will have the same crisis again in a few months and we must have a solution through 2013--this is even more b.s. than usual political gamesmanship. The only way we go through the same crisis again in a few months--is if he sits on his a** for those few months and doesn't use that time to come up with a long-term solution! I could continue on a screed against Obama and his failures, but frankly I'm worn out by the whole debt debate debacle at this time.
As to Obama's biggest complaint with the current plans, namely that we will have the same crisis again in a few months and we must have a solution through 2013--this is even more b.s. than usual political gamesmanship. The only way we go through the same crisis again in a few months--is if he sits on his a** for those few months and doesn't use that time to come up with a long-term solution! I could continue on a screed against Obama and his failures, but frankly I'm worn out by the whole debt debate debacle at this time.
Tuesday, July 5, 2011
Why Medicare Needs To Change
This thread kicked off by this item and subsequent discussion here.
First, let's review a couple basic realities of Medicare. It is a huge portion of the federal budget, and any attempts to seriously address the current out of control deficit and debt will involve some cuts to the program. The efficiency of the program itself is actually quite good--I've heard before that something like 2% of Medicare's budget goes to administrative costs (confirmed here), the rest goes out in paying benefits. Fraud does occur, and while it is not an isignificant amount of money, the overwhelming majority of payouts are legit.
There are a number of factors that go into increasing medical costs--R&D, people are living longer because of better treatments and have more chronic conditions to treat, prescription costs (related to the outrageous sums spent on R&D to bring a new drug to market), donated medical care, and also Medicare pricing practices.
The first three items are givens for the purpose of this post, and don't warrant any further discussion. The fourth item is an interesting side note I'll tackle here in a moment, and the fifth is the main focus of the post.
Donated medical care is a huge sink on healthcare. Ask anyone who works in another service profession, a restauranteer is my favorite example for this: Could you run your business if 70% of the people who came in never paid a dime for the products or services you rendered them? This is the reality of some emergency departments in this country. Thanks to EMTALA, an unfunded mandate if ever there was one, any patient who presents to an emergency room must be evaluated and must be treated if they are unstable or in labor, regardless of ability to pay (or how stupid the complaint). Now, I don't think anyone wants to say a woman in labor should be thrown out on the street because she doesn't have her insurance card with her, or that someone dropped off on the front steps with a knife in his back and bleeding to death should be left there, but anyone who has been to the ER more than a few times knows that one person's hangnail is another person's emergency. And, you ask, just how much money is set aside by the government to compensate the hospitals and doctors who treat those who cannot pay? Why, none, of course.
Now, as to Medicare pricing practices. Ever looked at a hospital bill before? Ever wonder why it costs 10 grand to open up an operating room, or how a bag of saline the size of your water bottle could cost $150? (There are reasons why it does cost significantly more than a bottle of Perrier, but the price the hospital pays for it is much less than $150.) The only people who pay that much for those services are those with hard cash and no insurance, everyone else pays a negotiated rate--and Medicare sets the bar on negotiated rates, which not only are significantly less than the line item on the bill, they are often at break-even or less than what it costs the hospital to provide said service in the first place. The actual reimbursement rate of Medicare varies considerably from item to item, surgery to surgery, and each year Medicare decreases the number of items it will reimburse for.
So, Medicare tells doctors and hospitals how much they will pay them ("You billed $15,000 to remove an appendix? Here's $4,000, take it and go."); private insurance companies in turn set their rates based on Medicare. These are negotiated rates that typically fall somewhere in-between what the line item charges are and what Medicare will pay for them. So, private insurance pays better than Medicare, but still less than what is asked (maybe $6,000 in the hypothetical appendix surgery above).
Where is the actual break-even point for the hospital, or physician? Obviously, it will vary, but in most cases it is greater than what Medicare reimburses. Think about that for a moment--the government, the single largest payor in the healthcare system, is not even covering the costs of providing the service, yet alone for any profits. And it's nigh impossible to expand, hire new staff, buy new equipment, or keep up with other overhead costs if there are no profits. By the way, any healthcare provider or organization that accepts any kind of insurance must accept Medicare, by law. The government requires that medicine operate at a loss when the government is paying for it--nothing like those fat-cat union contracts handed out for construction projects where everyone on the receiving end comes out ahead. As to where private insurance falls relative to the break-even point, I do not know. My gut tells me that it is probably in the black on most things but in the red on some others, though I have no hard data to support this assumption.
And so we come to the last of the three legs that supports medicine, the uninsured. If Medicare doesn't even cover costs (and Medicaid, a seperate program, pays even less than Medicare) and private insurance isn't sufficient to make up the difference, then the rest will have to pay through the nose to support the system. That's why it costs the consumer $150 for a liter of saline. The third leg must bear a disproportionate cost in order to prop up medicine--or rather, to counter the undermining of the system by government.
Do I have the answer for how to fix Medicare? Hell, no--if I did, I'd have written a book on it and run for Congress. But I do know that the system has to change, and that it's unrealistic and unfair to ask hospitals and doctors to just suck it up and kiss their revenue streams goodbye--because if the projected shortfall of tens of thousands of doctors in the coming years sounds bad now, wait until they can't make a decent living at it.
Hat tip to Ace of Spades HQ
First, let's review a couple basic realities of Medicare. It is a huge portion of the federal budget, and any attempts to seriously address the current out of control deficit and debt will involve some cuts to the program. The efficiency of the program itself is actually quite good--I've heard before that something like 2% of Medicare's budget goes to administrative costs (confirmed here), the rest goes out in paying benefits. Fraud does occur, and while it is not an isignificant amount of money, the overwhelming majority of payouts are legit.
There are a number of factors that go into increasing medical costs--R&D, people are living longer because of better treatments and have more chronic conditions to treat, prescription costs (related to the outrageous sums spent on R&D to bring a new drug to market), donated medical care, and also Medicare pricing practices.
The first three items are givens for the purpose of this post, and don't warrant any further discussion. The fourth item is an interesting side note I'll tackle here in a moment, and the fifth is the main focus of the post.
Donated medical care is a huge sink on healthcare. Ask anyone who works in another service profession, a restauranteer is my favorite example for this: Could you run your business if 70% of the people who came in never paid a dime for the products or services you rendered them? This is the reality of some emergency departments in this country. Thanks to EMTALA, an unfunded mandate if ever there was one, any patient who presents to an emergency room must be evaluated and must be treated if they are unstable or in labor, regardless of ability to pay (or how stupid the complaint). Now, I don't think anyone wants to say a woman in labor should be thrown out on the street because she doesn't have her insurance card with her, or that someone dropped off on the front steps with a knife in his back and bleeding to death should be left there, but anyone who has been to the ER more than a few times knows that one person's hangnail is another person's emergency. And, you ask, just how much money is set aside by the government to compensate the hospitals and doctors who treat those who cannot pay? Why, none, of course.
Now, as to Medicare pricing practices. Ever looked at a hospital bill before? Ever wonder why it costs 10 grand to open up an operating room, or how a bag of saline the size of your water bottle could cost $150? (There are reasons why it does cost significantly more than a bottle of Perrier, but the price the hospital pays for it is much less than $150.) The only people who pay that much for those services are those with hard cash and no insurance, everyone else pays a negotiated rate--and Medicare sets the bar on negotiated rates, which not only are significantly less than the line item on the bill, they are often at break-even or less than what it costs the hospital to provide said service in the first place. The actual reimbursement rate of Medicare varies considerably from item to item, surgery to surgery, and each year Medicare decreases the number of items it will reimburse for.
So, Medicare tells doctors and hospitals how much they will pay them ("You billed $15,000 to remove an appendix? Here's $4,000, take it and go."); private insurance companies in turn set their rates based on Medicare. These are negotiated rates that typically fall somewhere in-between what the line item charges are and what Medicare will pay for them. So, private insurance pays better than Medicare, but still less than what is asked (maybe $6,000 in the hypothetical appendix surgery above).
Where is the actual break-even point for the hospital, or physician? Obviously, it will vary, but in most cases it is greater than what Medicare reimburses. Think about that for a moment--the government, the single largest payor in the healthcare system, is not even covering the costs of providing the service, yet alone for any profits. And it's nigh impossible to expand, hire new staff, buy new equipment, or keep up with other overhead costs if there are no profits. By the way, any healthcare provider or organization that accepts any kind of insurance must accept Medicare, by law. The government requires that medicine operate at a loss when the government is paying for it--nothing like those fat-cat union contracts handed out for construction projects where everyone on the receiving end comes out ahead. As to where private insurance falls relative to the break-even point, I do not know. My gut tells me that it is probably in the black on most things but in the red on some others, though I have no hard data to support this assumption.
And so we come to the last of the three legs that supports medicine, the uninsured. If Medicare doesn't even cover costs (and Medicaid, a seperate program, pays even less than Medicare) and private insurance isn't sufficient to make up the difference, then the rest will have to pay through the nose to support the system. That's why it costs the consumer $150 for a liter of saline. The third leg must bear a disproportionate cost in order to prop up medicine--or rather, to counter the undermining of the system by government.
Do I have the answer for how to fix Medicare? Hell, no--if I did, I'd have written a book on it and run for Congress. But I do know that the system has to change, and that it's unrealistic and unfair to ask hospitals and doctors to just suck it up and kiss their revenue streams goodbye--because if the projected shortfall of tens of thousands of doctors in the coming years sounds bad now, wait until they can't make a decent living at it.
Hat tip to Ace of Spades HQ
Monday, July 4, 2011
Happy Independence Day
Sometimes, you want to see something profound--and sometimes, you want to see something sizzling on the grill.
Friday, July 1, 2011
Confirmation That The Crank Is Not Alone
A couple nights ago, I went to the bar with a couple coworkers after we were done for the day. The conversation quickly turned to politics, and I asked them to share their opinions on what they thought was the single most important function of government. It's worth noting that one of them self-identifies as a non-practicing Jew who considers himself a true moderate, and the other is a Mormon who considers himself a moderate conservative (no, I did not set this up in advance).
After a few seconds of consideration, first one and then the other said it was to provide for national defense. There was some heated debate about how strong the defense must be--i.e. enough to protect borders versus projecting power beyond borders--but the consensus was pretty clear that defense IS the priority.
I've never made a secret of the fact that I am a big fan of defense, that I believe in American exceptionalism most especially in the military, and that we should be able to project power globally. That being said, I firmly believe that if we had, say, Britain's or Germany's or even Sweden's military, scaled appropriately given our population and borders, we would still have a sufficient defense to enable the other benefits of this country, like the rights we enjoy as American citizens that are possible because we are protected from without. And let's face it, those rights are what define the United States as the country it is--freedom of religion, freedom of the press, due process, the right to bear arms, etc. But being the world's superpower is pretty freaking cool too, and I'm perfectly willing to let the government have a little bit bigger piece of my paycheck for that--as opposed to funding "art" that features profaning the Virgin Mary, or supporting radical Latino groups that want to reconquer the southwest, or ACORN.
How many people would be happy with China being the world's superpower--I'm guessing about 1.2 billion or so, but they're all Chinese, and the rest of the world would become pretty darn unhappy with it pretty quickly. Lots of countries (and seemingly, lots of liberals) piss and moan about the US being a superpower, but who else would be better for the world? Some client states might like if France were king, but it wouldn't do the world as a whole much good. The U.N. is an attempt to put everyone on equal footing--how's that working out? In the end, there has to be at least one nation who is the leader if there is to be stability--we did the two nation thing for 50-odd years, and it worked, there was global stability of a kind, though it relied on MAD to balance on the knife edge, a truly mad system if ever there was one. Orwell depicted a 3 superpower perpetual Mexican standoff in 1984, which was stable though also patently insane (and that's setting aside the domestic policies of that dystopian nightmare). No, if there is to be a better world, taking in the limits of human nature, there should be one superpower, and frankly, the US is the only nation currently with the resources and the will to be a superpower that has also consistently demonstrated that it will generally try to do the right thing.
Is America perfect? Hardly. But to twist a great Chruchill quote (which he in turn quoted from an unknown source), "America is the worst possible world leader, except for all the rest..."
After a few seconds of consideration, first one and then the other said it was to provide for national defense. There was some heated debate about how strong the defense must be--i.e. enough to protect borders versus projecting power beyond borders--but the consensus was pretty clear that defense IS the priority.
I've never made a secret of the fact that I am a big fan of defense, that I believe in American exceptionalism most especially in the military, and that we should be able to project power globally. That being said, I firmly believe that if we had, say, Britain's or Germany's or even Sweden's military, scaled appropriately given our population and borders, we would still have a sufficient defense to enable the other benefits of this country, like the rights we enjoy as American citizens that are possible because we are protected from without. And let's face it, those rights are what define the United States as the country it is--freedom of religion, freedom of the press, due process, the right to bear arms, etc. But being the world's superpower is pretty freaking cool too, and I'm perfectly willing to let the government have a little bit bigger piece of my paycheck for that--as opposed to funding "art" that features profaning the Virgin Mary, or supporting radical Latino groups that want to reconquer the southwest, or ACORN.
How many people would be happy with China being the world's superpower--I'm guessing about 1.2 billion or so, but they're all Chinese, and the rest of the world would become pretty darn unhappy with it pretty quickly. Lots of countries (and seemingly, lots of liberals) piss and moan about the US being a superpower, but who else would be better for the world? Some client states might like if France were king, but it wouldn't do the world as a whole much good. The U.N. is an attempt to put everyone on equal footing--how's that working out? In the end, there has to be at least one nation who is the leader if there is to be stability--we did the two nation thing for 50-odd years, and it worked, there was global stability of a kind, though it relied on MAD to balance on the knife edge, a truly mad system if ever there was one. Orwell depicted a 3 superpower perpetual Mexican standoff in 1984, which was stable though also patently insane (and that's setting aside the domestic policies of that dystopian nightmare). No, if there is to be a better world, taking in the limits of human nature, there should be one superpower, and frankly, the US is the only nation currently with the resources and the will to be a superpower that has also consistently demonstrated that it will generally try to do the right thing.
Is America perfect? Hardly. But to twist a great Chruchill quote (which he in turn quoted from an unknown source), "America is the worst possible world leader, except for all the rest..."
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