I didn't just depend on Krugman. I read the Wall Street Journal every day, news and editorial page. It was pretty interesting, until they discovered supply-side economics and went completely off the wall. I'm not an economist, but even I can see that it was a convenient excuse for rich guys to raise taxes and wasn't going to work. Which it didn't. Now they want to deregulate the FDA and the financial industry. It's become the right-wing Republican Pravda. (And they're not even principled conservatives any more.)
Now I think the most reliable economics I read is from Science magazine. They're peer-reviewed so they can't get too crazy.
href="http://www.ritholtz.com/blog/">The Big Picture/quote>
Well, I already read Steve Brill's article. This essay is incoherent. The guy can't write. If nothing else, Krugman knows how to write a readable essay where he gets to the point (and has a point).
I have no more than a layman's knowledge of economics. I do know a lot about health policy. When I read what an economist says about health policy, I can usually tell whether he knows what he's talking about. The shoemaker criticized the sculptor's sandals.
Krugman usually gets it right. The Wall Street Journal editorial page gets it wrong. They've become a PR flack for Genetech and the rest of the health care industry.
I still read the WSJ, because I want to know what the other side has to say. I would also hope they would have something intelligent to say occasionally, but I haven't had much luck there.
It's too bad we don't have economics journalism like we have science journalism, which is easy for non-specialists to understand (at least if they do a little work) and isn't promoting their own financial interests. Haven't found one. These don't work.
People are entitled to the deal they contracted for. They paid FICA tax, with the assurance that they would get Medicare and Social Security on certain terms, and now they're entitled to Medicare and Social Security on those terms.
If I contracted a mortgage with a bank on certain terms, I'd have to pay them back on those terms. Maybe I paid in a lot more than they said I would pay. Maybe the house is worth a lot less than they said it would be. I still have to pay back the original terms.
John Galt's speech, as much of it as I could get through, said that he believed in the sanctity of contracts. That doesn't sound like the way conservatives treat social programs.
There was a collection of articles and letters about the Swiss health care system in the Journal of The American Medical Association in 2005. Regina Herzlinger, who is one of the most popular advocates for a Swiss-style health care system here, with editorial columns in the Wall Street Journal and elsewhere, wrote an enthusiastic article about how the Swiss system is consumer-driven, gives people free choice, and is doing wonderfully. JAMA likes to get both sides of the story, so they had a more measured article by Uwe Reinhardt, the health policy professor at Princeton. A few weeks later JAMA published letters, including some from real doctors in Switzerland, the tenor of which is reflected by their headline, "Holes in the Swiss health care system." http://jama.jamanetwork.com/article.aspx?articleid=200895
Unfortunately JAMA is mostly paywalled, and my notes are on another computer, but basically their free-market, consumer-driven system didn't work. Once you have a system of free-market incentives, doctors and hospitals have a great incentive to get around the system. For example, they have co-payments and deductibles, to give patients a stake in the game. However, they can't have copayments for treatments costing $50,000 or $100,000, because 20% of $100,000 is more than middle-class people want to be at risk for. So after a certain maximum, they stop the copayments. Result: Once they reach the maximum, doctors and hospitals can spend on anything -- CAT scans, weeks in the ICU, surgery, expensive drugs, consultations, anything to save grandma -- and the insurance company has to pay 100%. So according to the Swiss doctors, the present growth of the Swiss system is unsustainable, and the Swiss were trying to figure out how to reform the system. (BTW the Swiss health insurance companies are very heavily regulated, and it's considered bribery to contribute money to political campaigns. Try that here.)
So the Swiss health care system doesn't work. What else have you got?
Socialized medicine is economically efficient and single payer is also somewhat efficient and preserves the private doctor practices. I haven't seen any market-based system that works. They look good on paper but when you try them out in real life they don't work, and there are careful evaluations in peer-reviewed medical journals to document their failure. The government would have to correct the free market by giving massive subsidies to people who can't afford to pay free-market health care (as Obamacare does). That generates perverse incentives. People on welfare can't work because they'd lose their health care. The administration becomes complicated and expensive. In the US, the administrative costs of the insurance companies and the providers who deal with them takes about 1/3 of your health care premium dollar.
Marcia Angell, the former editor of the New England Journal of Medicine, said that the more incremental changes you make, the more administratively complicated the system becomes, and the more expensive it becomes. Angell supported single payer. It works in Canada.
The problems with depending on a no-load mutual fund for your retirement are (1) The market might hit a downturn as you retire (2) You might run out of money before you die.
The numbers I see say that the top 3% of taxpayers pay a lot of the taxes because they get a lot of the income. Warren Buffet said that he pays a lower rate than his secretary. They stopped publishing the Statistical Abstract of the United States, but in the last edition, they said that the top 20% earned half the revenue, and the next 20% earned half the remainder. Now the inequality is even greater. So we could tax the top 40% and get as much as we're getting now. If the rich desert us, let them go. I'm willing to take that chance. There are plenty of creators pounding on the doors to get in.
Krugman and others also say that wealthy Americans pay less now in taxes than they've paid since the Gilded Age, and they pay less here than any other industrial country (the Cayman Islands isn't an industrial country). I think they can pay as much as the Europeans do.
I think we can grow the economy by bringing our social safety net, education and training up to German or Scandinavian levels. A billion dollars spent on education will boost the economy more than a billion dollars spent on upscale restaurants, $2,000 shoes, $1 million weddings, boats, and the other luxuries that the rich spend their money on. Adam Smith said we should discourage luxuries.
You're giving me a theoretical argument. I'm telling you what I saw when I looked at the facts. If facts don't correspond to theory, I go with the facts.
I suggest you look at the facts, by comparing, without cherry-picking, similar government and private functions, to see which does better.
The greatest falsehood of our political debate is that the government can't do things more efficiently than private enterprise.
I've compared industries where the government was working side by side with private enterprises, and it was straightforward to compare the results. For example, in the electric industry, there are private, federal, state and locally-owned power generation plants. Everybody in the industry agrees on the standards to judge them -- basically the percentage of downtime and cost per kilowatt-hour. The federally-run power plants, like the Tennessee Valley Authority, were consistently at the top of the list. Some of the private plants were at the top, some of them were at the bottom. The government did a good job.
If you don't believe the government can do anything efficiently, then go out and look at the data, and see if it supports your hypothesis. When I look at the data, it doesn't.
Does anybody stop to ask why our per-capita spending on healthcare has skyrocketed and we spend more than other countries with better longevity?
Lots of people have asked that question. If you read Slashdot, you'll see that most people here know that almost every other developed country in the world has a government-financed system of health care, and they spend half or less of what we spend on health care with about the same outcomes. (Switzerland, the country that has the system most like ours with private insurance, is the country with the second highest health care costs after us.)
If you look around the developed world, to see what works and what doesn't work, you'll see that government-financed health care, including socialized medicine, works better than ours, and no country has come up with a free-market health care system that works.
Obama had the chance to implement a single-payer system, or a single-payer option, and after $8 million in campaign contributions from the health care industry, he chose Romneycare instead. We could have saved a lot of money.
Unfortunately I don't see any of the members of congress, the administration or any of the health insurance companies or the medical profession fixing this because they've been given a license to rape us all in terms of our costs and now with ACA they have a federally mandated right to steal from you.
Paul Krugman has explained this, which he calls one of the "cockroach ideas" that keeps coming back no matter how many times you flush them down the toilet:
Social Security is a government program supported by a dedicated tax, like highway maintenance. Now you can say that assigning a particular tax to a particular program is merely a fiction, but in fact such assignments have both legal and political force. If Ronald Reagan had said, back in the 1980s, “Let’s increase a regressive tax that falls mainly on the working class, while cutting taxes that fall mainly on much richer people,” he would have faced a political firestorm. But because the increase in the regressive payroll tax was recommended by the Greenspan Commission to support Social Security, it was politically in a different box – you might even call it a lockbox – from Reagan’s tax cuts.
The date at which the trust fund will run out, according to Social Security Administration projections, has receded steadily into the future: 10 years ago it was 2029, now it’s 2042.
But the privatizers won’t take yes for an answer when it comes to the sustainability of Social Security. Their answer to the pretty good numbers is to say that the trust fund is meaningless, because it’s invested in U.S. government bonds.
But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come....
What’s really going on here? Conservatives hate Social Security for ideological reasons: its success undermines their claim that government is always the problem, never the solution. But they receive crucial support from Washington insiders, for whom a declared willingness to cut Social Security has long served as a badge of fiscal seriousness, never mind the arithmetic.
The major entitlement spending is for Medicare and Social Security. People are entitled to Medicare and Social Security because they paid for them all their lives.
Do you propose that the government not pay people the benefits they paid for as part of a contract?
That would be like buying health insurance from a private company, and having them decide not to pay you when you get sick and need it, because that would be a good way for them to save money.
You might be able to justify the "collateral damage" by saying it's the target's fault for being around other people and not distinctly marking themselves as a target.
That's right. If you're working at the World Trade Center, it's your responsibility to know that there are other people working in the World Trade Center around you who are engaged in war against Islam, and the Islamic defenders are liable to kill them using methods that have collateral damage.
So it's perfectly legal under the laws of war as interpreted by the last Republican and Democratic presidents to fly a jumbo jet into the World Trade Center. The law that applies to a drone applies to a jumbo jet.
Why is it, by the way, that people always seem to ignore that the Geneva Conventions and other laws of warfare actually take into account the fact that the other side might not fight by those rules, and in that case effectively absolves the side that does?
Because the Geneva Conventions and the other laws of warfare don't absolve one side when the other side doesn't fight by the rules?
Slashdot Mirror
This is what happens when you let anti-government conservatives run the government.
They say, "Contract? What contract?" and they take handfulls out of your Social Security and Medicare.
Yes, I read that Brill article. That's the free market. The costs in Canada for the same treatment, with the same outcomes, cost half as much.
I didn't just depend on Krugman. I read the Wall Street Journal every day, news and editorial page. It was pretty interesting, until they discovered supply-side economics and went completely off the wall. I'm not an economist, but even I can see that it was a convenient excuse for rich guys to raise taxes and wasn't going to work. Which it didn't. Now they want to deregulate the FDA and the financial industry. It's become the right-wing Republican Pravda. (And they're not even principled conservatives any more.)
Now I think the most reliable economics I read is from Science magazine. They're peer-reviewed so they can't get too crazy.
href="http://www.ritholtz.com/blog/">The Big Picture/quote>
Interesting guy. http://articles.washingtonpost.com/2011-11-05/business/35283739_1_credit-crisis-financial-crisis-wall-street I'll remember that name. But he's basically an investor and trader. I'm not interested in that. I would be interested to know whether he called out the housing derivatives market before they crashed.
Interfluidity
Well, I already read Steve Brill's article. This essay is incoherent. The guy can't write. If nothing else, Krugman knows how to write a readable essay where he gets to the point (and has a point).
I have no more than a layman's knowledge of economics. I do know a lot about health policy. When I read what an economist says about health policy, I can usually tell whether he knows what he's talking about. The shoemaker criticized the sculptor's sandals.
Krugman usually gets it right. The Wall Street Journal editorial page gets it wrong. They've become a PR flack for Genetech and the rest of the health care industry.
I still read the WSJ, because I want to know what the other side has to say. I would also hope they would have something intelligent to say occasionally, but I haven't had much luck there.
It's too bad we don't have economics journalism like we have science journalism, which is easy for non-specialists to understand (at least if they do a little work) and isn't promoting their own financial interests. Haven't found one. These don't work.
Thanks for the suggestions.
Lackluster leaders with no vision seems to be the problem.
People are entitled to the deal they contracted for. They paid FICA tax, with the assurance that they would get Medicare and Social Security on certain terms, and now they're entitled to Medicare and Social Security on those terms.
If I contracted a mortgage with a bank on certain terms, I'd have to pay them back on those terms. Maybe I paid in a lot more than they said I would pay. Maybe the house is worth a lot less than they said it would be. I still have to pay back the original terms.
John Galt's speech, as much of it as I could get through, said that he believed in the sanctity of contracts. That doesn't sound like the way conservatives treat social programs.
There was a collection of articles and letters about the Swiss health care system in the Journal of The American Medical Association in 2005. Regina Herzlinger, who is one of the most popular advocates for a Swiss-style health care system here, with editorial columns in the Wall Street Journal and elsewhere, wrote an enthusiastic article about how the Swiss system is consumer-driven, gives people free choice, and is doing wonderfully. JAMA likes to get both sides of the story, so they had a more measured article by Uwe Reinhardt, the health policy professor at Princeton. A few weeks later JAMA published letters, including some from real doctors in Switzerland, the tenor of which is reflected by their headline, "Holes in the Swiss health care system." http://jama.jamanetwork.com/article.aspx?articleid=200895
Unfortunately JAMA is mostly paywalled, and my notes are on another computer, but basically their free-market, consumer-driven system didn't work. Once you have a system of free-market incentives, doctors and hospitals have a great incentive to get around the system. For example, they have co-payments and deductibles, to give patients a stake in the game. However, they can't have copayments for treatments costing $50,000 or $100,000, because 20% of $100,000 is more than middle-class people want to be at risk for. So after a certain maximum, they stop the copayments. Result: Once they reach the maximum, doctors and hospitals can spend on anything -- CAT scans, weeks in the ICU, surgery, expensive drugs, consultations, anything to save grandma -- and the insurance company has to pay 100%. So according to the Swiss doctors, the present growth of the Swiss system is unsustainable, and the Swiss were trying to figure out how to reform the system. (BTW the Swiss health insurance companies are very heavily regulated, and it's considered bribery to contribute money to political campaigns. Try that here.)
So the Swiss health care system doesn't work. What else have you got?
Socialized medicine is economically efficient and single payer is also somewhat efficient and preserves the private doctor practices. I haven't seen any market-based system that works. They look good on paper but when you try them out in real life they don't work, and there are careful evaluations in peer-reviewed medical journals to document their failure. The government would have to correct the free market by giving massive subsidies to people who can't afford to pay free-market health care (as Obamacare does). That generates perverse incentives. People on welfare can't work because they'd lose their health care. The administration becomes complicated and expensive. In the US, the administrative costs of the insurance companies and the providers who deal with them takes about 1/3 of your health care premium dollar.
Marcia Angell, the former editor of the New England Journal of Medicine, said that the more incremental changes you make, the more administratively complicated the system becomes, and the more expensive it becomes. Angell supported single payer. It works in Canada.
The problems with depending on a no-load mutual fund for your retirement are (1) The market might hit a downturn as you retire (2) You might run out of money before you die.
The numbers I see say that the top 3% of taxpayers pay a lot of the taxes because they get a lot of the income. Warren Buffet said that he pays a lower rate than his secretary. They stopped publishing the Statistical Abstract of the United States, but in the last edition, they said that the top 20% earned half the revenue, and the next 20% earned half the remainder. Now the inequality is even greater. So we could tax the top 40% and get as much as we're getting now. If the rich desert us, let them go. I'm willing to take that chance. There are plenty of creators pounding on the doors to get in.
Krugman and others also say that wealthy Americans pay less now in taxes than they've paid since the Gilded Age, and they pay less here than any other industrial country (the Cayman Islands isn't an industrial country). I think they can pay as much as the Europeans do.
I think we can grow the economy by bringing our social safety net, education and training up to German or Scandinavian levels. A billion dollars spent on education will boost the economy more than a billion dollars spent on upscale restaurants, $2,000 shoes, $1 million weddings, boats, and the other luxuries that the rich spend their money on. Adam Smith said we should discourage luxuries.
Thank you for summarizing.
Everybody I know who is collecting Social Security is getting everything they're supposed to get.
I suggest you read that Paul Krugman column I linked to. If that doesn't convince you, I can't help.
I dunno. Krugman has a PhD, a professorship at Princeton, and a Nobel prize.
I suggest you read his article again more carefully.
Exactly.
You're giving me a theoretical argument. I'm telling you what I saw when I looked at the facts. If facts don't correspond to theory, I go with the facts.
I suggest you look at the facts, by comparing, without cherry-picking, similar government and private functions, to see which does better.
Do you have a friend you trust who is an accountant or an economist? Show him Krugman's column. Ask him to explain it to you.
The greatest falsehood of our political debate is that the government can't do things more efficiently than private enterprise.
I've compared industries where the government was working side by side with private enterprises, and it was straightforward to compare the results. For example, in the electric industry, there are private, federal, state and locally-owned power generation plants. Everybody in the industry agrees on the standards to judge them -- basically the percentage of downtime and cost per kilowatt-hour. The federally-run power plants, like the Tennessee Valley Authority, were consistently at the top of the list. Some of the private plants were at the top, some of them were at the bottom. The government did a good job.
If you don't believe the government can do anything efficiently, then go out and look at the data, and see if it supports your hypothesis. When I look at the data, it doesn't.
Does anybody stop to ask why our per-capita spending on healthcare has skyrocketed and we spend more than other countries with better longevity?
Lots of people have asked that question. If you read Slashdot, you'll see that most people here know that almost every other developed country in the world has a government-financed system of health care, and they spend half or less of what we spend on health care with about the same outcomes. (Switzerland, the country that has the system most like ours with private insurance, is the country with the second highest health care costs after us.)
If you look around the developed world, to see what works and what doesn't work, you'll see that government-financed health care, including socialized medicine, works better than ours, and no country has come up with a free-market health care system that works.
Obama had the chance to implement a single-payer system, or a single-payer option, and after $8 million in campaign contributions from the health care industry, he chose Romneycare instead. We could have saved a lot of money.
Unfortunately I don't see any of the members of congress, the administration or any of the health insurance companies or the medical profession fixing this because they've been given a license to rape us all in terms of our costs and now with ACA they have a federally mandated right to steal from you.
Don't blame me. I voted for Jill Stein.
Paul Krugman has explained this, which he calls one of the "cockroach ideas" that keeps coming back no matter how many times you flush them down the toilet:
http://krugman.blogs.nytimes.com/2008/03/28/about-the-social-security-trust-fund/
Social Security is a government program supported by a dedicated tax, like highway maintenance. Now you can say that assigning a particular tax to a particular program is merely a fiction, but in fact such assignments have both legal and political force. If Ronald Reagan had said, back in the 1980s, “Let’s increase a regressive tax that falls mainly on the working class, while cutting taxes that fall mainly on much richer people,” he would have faced a political firestorm. But because the increase in the regressive payroll tax was recommended by the Greenspan Commission to support Social Security, it was politically in a different box – you might even call it a lockbox – from Reagan’s tax cuts.
The date at which the trust fund will run out, according to Social Security Administration projections, has receded steadily into the future: 10 years ago it was 2029, now it’s 2042.
But the privatizers won’t take yes for an answer when it comes to the sustainability of Social Security. Their answer to the pretty good numbers is to say that the trust fund is meaningless, because it’s invested in U.S. government bonds.
Social Security isn't bankrupt.
To quote Paul Krugman:
http://www.nytimes.com/2010/08/16/opinion/16krugman.html
But neither of these potential problems is a clear and present danger. Social Security has been running surpluses for the last quarter-century, banking those surpluses in a special account, the so-called trust fund. The program won’t have to turn to Congress for help or cut benefits until or unless the trust fund is exhausted, which the program’s actuaries don’t expect to happen until 2037 — and there’s a significant chance, according to their estimates, that that day will never come. ...
What’s really going on here? Conservatives hate Social Security for ideological reasons: its success undermines their claim that government is always the problem, never the solution. But they receive crucial support from Washington insiders, for whom a declared willingness to cut Social Security has long served as a badge of fiscal seriousness, never mind the arithmetic.
I've seen economists say that you can't buy an annuity on the free market that would give you as good a return as Social Security.
It's one of those things that the government can do more efficiently than private enterprise.
So after the government has taken all this money, you would change the law to say that the government won't give it back to me?
The major entitlement spending is for Medicare and Social Security. People are entitled to Medicare and Social Security because they paid for them all their lives.
Do you propose that the government not pay people the benefits they paid for as part of a contract?
That would be like buying health insurance from a private company, and having them decide not to pay you when you get sick and need it, because that would be a good way for them to save money.
If it were otherwise, the enemy need only strap children to his tanks and roll forward to beat you.
The Israeli army did that. http://en.wikipedia.org/wiki/Human_shield#Israel
In their defense, everybody does it.
You might be able to justify the "collateral damage" by saying it's the target's fault for being around other people and not distinctly marking themselves as a target.
That's right. If you're working at the World Trade Center, it's your responsibility to know that there are other people working in the World Trade Center around you who are engaged in war against Islam, and the Islamic defenders are liable to kill them using methods that have collateral damage.
So it's perfectly legal under the laws of war as interpreted by the last Republican and Democratic presidents to fly a jumbo jet into the World Trade Center. The law that applies to a drone applies to a jumbo jet.
Why is it, by the way, that people always seem to ignore that the Geneva Conventions and other laws of warfare actually take into account the fact that the other side might not fight by those rules, and in that case effectively absolves the side that does?
Because the Geneva Conventions and the other laws of warfare don't absolve one side when the other side doesn't fight by the rules?
Alternately, we could give the terrorists jet fighters and tanks, so they could fight our armies directly and wouldn't have to attack civilians.
Didn't we do that once?
Which two left-wing Democrats?