Tied to the mast
…but orange now and black

Debating health policy’n shit with a self-described “paleo-con”

So I managed to embroil myself in not 1, not 2, but 3 facebook debates yesterday on a variety of topics relating to American fiscal, enviornmental, and foreign policy, and the Canadian party system. A particularly good one was sparked when my friend and sometimes classmate Grant posted this photo…

…to an album on Facebook over the caption “I’m ambivalent about cancelling the F-22, but this makes a good point about the paltry savings involved…”

It was a romp. Here’s how it went:

ME: “The Air Force brass wanted $4 billion in the fiscal year 2010 budget to build 20 more F-22s. Gates slashed the request to zero. The Senate Armed Services Committee voted, 13-11, to shift $1.7 billion from other programs in order to fund another seven planes. That’s the line item that the full Senate excised this afternoon.”

Still paltry, but if we’re comparing policy, let’s compare policy.

This, not so paltry.

GRANT: Just to be clear: I am in favor of killing ALL THREE of these programs.

There isn’t money for ANY of them, but starting with the smallest one seems perverse.

I said, I’m ambivalent about the F-22; the F-35 seems like a much more aforable option, when it is available.

That said, I find it interesting that the Obama administration has the will to save a tiny sum on national defense (a core federal responsability if there ever was one) yet is insisting on ramming through two poorly-designed programs costing nearly a THOUSAND times more.

Cap-and-trade, for example, is nearly universally derided by economists as an inefficent way of reducing emissions- yet we are supposed to believe that it needs to be rammed through urgently, costing $1 TRILLION?…

If you’re for fiscal restraint (as I am), you’re answer ought to be “kill all three”.

ME: Cap and trade is not “nearly universally derided by economists.” It’s just “nearly universally derided” by the odd coalition of economists that conservatives like and economists that Greenpeace likes. There’s a pretty big space in between those two groups occupied by a number of prominent names who, while granting that the bill is not ideal, argue that it is absolutely a “more efficient” option for cutting emissions than inaction.

On health: a $1 trillion dollar over 10 year plan to fundamentally restructure health care is a lot of money, but it’s a fraction of what will be spent on Medicare / Medicaid over that period (let alone the 4 trillion projected to be spent on defense over the period). It’s less than 1.35 trillion over 10 year Bush tax cuts, and promises to similarly put money back into the pockets of Americans and small business owners, and, by capitalizing major systemic restructuring, make the current system sustainable over the long run (which it currently is not).

GRANT: Except, that the current proposal DOESN’T “fundamentally restructure” health care.

Your health care paragraph is utter nonsense and you are capable of better.

I didn’t say anything about the bush tax cuts (which I opposed) or the total defense budget (which i agree needs reductions), so those points can be dismissed out of hand...

The program won’t “put money back into peoples pockets”- the only way to pay for the program will involve tax increases (either by taxing benefits or direct tax increases)

Second, the proposed system will NOT be sustainable- it contains no mechanism for controlling costs. There is no convincing reason to believe that while every other similar health system (see Romneycare) has had to deal with rising costs, this one will magically be different.

Third, EVEN IF cap-and-trade (which is clearly less effective than a straight carbon tax) and the healthcare proposal DID work, they simply aren’t affordable right now.

GRANT (ctd.): Finally, while I concede that these are important issues, EVEN IF there was some way to pay for the legislation without running massive deficits, Congress and the President should at least have the decency to READ what they propose before insisting it is vital, which is not the case here.

ME: Re: the Bush tax cuts, and defense spending… I’m glad we agree.

Re: your last paragraph… I’m glad Roosevelt didn’t feel that way about WWII.

And my health paragraph isn’t nonsense. Public health insurance can use market share to bargain down the price of services, it can operate outside the need for profit, and quarterly results, AND it applies competitive pressure to the rest of the insurance industry to lower prices. From the perspective of the consumer currently buying healthcare (whether individual or business), that promises pretty massive savings, and a savings that, if not totally sabotaged by the lobbyists, promises to considerably outweigh the tax burden that will be required to pay for it (over the next 10 years). [This entry owes a lot to Ezra Klein, whose blogging on this topic I think is pretty excellent.]

Check out Pearlstein’s column from today’s Post, 

GRANT: …except that WWII was a legitimate threat to the survival of the state, which, i’m sorry, a deficient health system is not.

And regardless of consumer savings (which may or may not materialize- though frankly I doubt they are possible except through rationing) how do you propose that the GOVERNMENT be able to afford it?

How can you seriously propose that a country that is running deficits which will remain above 4% of GDP for the next decade or so implement a massive new set of social programs?

and since you seem to have ducked the question, I will ask it again: why is this so urgent that those charged with voting on it can’t take the time to actually read it? If this is vital, why the rush job?

ME: As terrible as you might think my motives are, I didn’t “duck” anything. I was busy writing my response when you put the question up… didn’t realize it was there until you mentioned it. My answer is this: IMO, by and large congresspeople are lazy assholes whose job it has been and is for the next week to read it, and have their staffs read it. 1,000 pages is a lot, but it’s nothing that either of us didn’t do over some 2 week period over the last year (and its nothing that the insurance lobby didn’t manage to read and digest in a fraction of the time). But recognizing that they’re too lazy to do their homework, you might ask, why not wait? You know as well as I do that inertia is absolutely deadly in the legislative process. And if this effort dies, there’s not going to be the political capital for another one for a long time… hence why, as Pearlstein titled his column, “imperfect health reform still beats the status quo.”

(to be continued in a second)

GRANT: For the record, it was not my intention to call your motives into question- any ribbing here should be taken as just that 😉

ME: I would note that, comparative legitimacy of the causes of WWII vs health reform aside, following the massive expenditure on the New Deal and WWII, America’s middle class somehow managed to find itself in the middle of a golden age. Why? In large part because both of those “public programs” invested intensely in the country’s human capital. Health reform is a similar kind of public investment.

And re: “a country that is running deficits which will remain above 4% of GDP for the next decade or so implement a massive new set of social programs”… a hesitancy to do just that by Roosevelt, many economists argue, is exactly what catapulted America into the second and more serious wave of the great depression [Self-fact check: as will be discussed later, the second wave wasn’t actually “more serious”… it was just very serious… 18% unemployment serious (vs. a peak of 25% in the first wave)].

And re: ribbing. No offense taken. Punk bitch. 😉

GRANT: Except that the new deal didn’t work- unemployment remained above 10% until 1940- an equal number of economists have argued that the New Deal actually slowed the recovery.

Moreover, the post WWII boom actually had more to do with millions of people returning home, starting families, and releasing all of the pent-up demmand that had been postponed during the war- rather than anything FDR did in the 30’s.

(If you have a plan for increasing personal savings to WWII levels, I’m all for it!).

But historical debates aside,

Once again I will ask, how do you propose that the government pay for this? How will the budget EVER be balanced again? If your answer is permanently higher income taxes, for example, say so.
And if that IS your answer, then surely it is worthwhile to pass the BEST plan possible, not any plan that you can come up with.

…and the “legislative inertia is deadly” argument sounds a lot like “we’re never going to have this much political capital again, so let’s spend it!” – i.e. mere opportunism, which has a history of creating unsuccessful and expensive programs (see: the Great Society, or for that matter, Iraq)

ME: Gawd, I guess we have to do this then… The New Deal brought unemployment from 25% in ’33 to about 12% in ’37, at which point Roosevelt, concerned about deficits, massively cut it back, shooting unemployment back up to the 18% level. That’s not unremarkable, and I’m inclined to label your “equal number of economists” supply sider revisionists and speculate that most of them (unlike my boys Stiglitz, Roubini, and Krugman) were complicit in the crash we’re currently in. But then… maybe you’d be inclined to turn that back on me. Ultimately though, i don’t think either of us is qualified to debate the comparative merits of the theories propounded by Stiglitz versus, say, Mankiw.

Taxes will obviously need to play a part in the solution. I don’t know about “permanent increases” (whatever that means). Because of the economic topography of health car as it is, Americans are already paying twice as much per capita for Medicare and Medicaid as Canadians do for universal coverage…

.. and yes, I would like to see the “best” plan possible be passed. But what exactly is possible is what I’m, following Pearlstein, disputing.

GRANT: RE: the new deal, I would suggest that Roosevelt’s actions, pre-1937, were a major reason why unemployment stayed that high for that long- because the public borrowing had the effect of crowding private captial out of the market.
…and I would point out that the solutions proposed by your “boys” (big stimulus packages) don’t seem to be working too well right now (and yes, I know that they want them to be even bigger, but I digress…)

ME: So why did umemployment leap by ~50% as soon as Roosevelt pulled back on the public borrowing in ’37?

GRANT: I would suggest it was because most of the “growth” he did create was artificially due to government spending.
You see, this is why deficit based stimulus packages are unsustainable- because they substitute public growth for private growth- and so crash as soon as the government returns to fiscal sanity.

But since neither of us is qualifed on this (as you pointed out), I suggest we leave it.

ME: And what was private capital going to do? To quote Krugman in this video debate with George Will, the factories were sitting idle, were they going to build new ones? It wasn’t a problem of supply.

GRANT: I think what this comes down to, in the final analysis, is a difference in our confidence in government programs generally.
When confronted with a new piece of legislation, I tend to ask the questions
(1) Based on experiance, will it work?
(2) Do we need it, and if so how badly?
(3) How much will it cost?
(4) How do we plan to pay for it?

If I don’t get good answers to all of them, I tend to oppose the program.

This is especially true of programs with large long-term costs- which you admit this will have, at least to the government.

Basically, I want programs to be as well designed as possible, and I want a plan for how to pay for them.

Right now, health are reform and cap and trade are poorly designed, and the fiscal timing of them could not be worse. Give me a better program, when there is actually money for it.

ME: (1) Based on experience, will not doing anything work? No.

(2) Do we need to sit idly, if so how badly? Your argument is that since we’re in a fiscal crisis we badly need to sit idly so that we don’t add to the deficit… so you would say Yes. I would say that sitting idly in the current economic client is kicking the shit out of people, so I would say No.

(3) How much will it cost? A shitload.

(4) How do we pay for it? Personal bankruptcy.

Anyway, this has been fun, but I’m going to play some ball. Catch you later.

GRANT: You are conflating cap-and-trade and health care reform with the economy- they are very different things.

But since two can play at this game…

(1) Based on experiance, will they work:

Cap-and-trade? no experiance- so no idea
the Health care proposal? partially, yes.

(2) Do we need them, and if so, how badly?

Cap-and-trade: Global effects will be marginal, so no.
Health reform: yes, but won’t kill us to wait 2 years.

(3) How much will they cost?
Total: 2.5 Trillion, plus.

(4)How do we pay for them?
We don’t have a damn clue.

So Cap-and-trade should be killed permanently, health care reform needs to be re-thought.

ME: I’m not conflating anything. I was talking specifically about health care, but to act like it’s not systemically tied to the economy, especially as the system exists now, is inaccurate. So take your “very” and shove it up your va-j-j (as they say… by-the-by, you know that facebook thinks you’re a woman right? I’ve got all these messages in my inbox saying “Grant Morgan commented on her photo”). But to return to my point, how many people have been losing their employer provided insurance over the past year. A shit-ton. When those people find themselves in need of emergency medical assistance, they pay for it with *drum roll… extended drum roll… FADING Fading fading*…

And anyway, I reject your whole “wait 2 years” thing. If it’s not sabotaged, health reform, contrary to lobbyist propaganda, will do a lot to improve the economy. Reducing business’ health insurance expenses, and untying employees from their reliance on employer-based plans.

GRANT: I don’t even know what to say about that first paragraph, except that ad hominem looks bad on you…

Oh, and your point about people losing their insurance due to layoffs would only be relevant if you were proposing temporary relief for those people specifically- which is NOT what this is.

As for your second paragraph: Sure, if you really think that all of those benefits will accrue without costs- do you really think that the tax increases or new taxes on benefits which this program WILL require to pay for it won’t have counter-acting economic effects? Please. You can’t have the government raising that much revenue without it having a chilling effect on the economy.

At very best, this is an economically neutral piece of legislation- at least for the short/medium term.

Oh yeah, and ever notice how something is “lobbyist propanda” only when you oppose the point it makes?

ME: I thought we were ribbing? Anyway, it wasn’t an ad hominem. It, wasn’t even an ad feminem. It was just (a) a catagorical rejection of your claim that the economy and health care are “very” different, and (b) a means of communicating to you that facebook is telling my g-mail that you’re a girl, which I suspect is the result of a prank from someone. I’d send you a screenshot but can’t figure out how to take one on this laptop.

The fact that so many people have lost their insurance due to layoffs only illustrates the crappiness of the system. And it would be temporary, if they chose to go back to employer provided insurance once they got back on their feet.

There will be countervailing economic effects, but the fact of countervailing currents doesn’t mean that one won’t be stronger than the other.

Re your final point: I oppose a lot if not most lobbyist propaganda, so there’s a pretty big overlap between lobbyist propaganda and points that I oppose generally, yes.

GRANT: I am not defending the holes in the current system, but I would simply point out that this legislation does a piss-poor patchwork job of covering them – at an extreme cost that would either create unsustainable debts (if new taxes were not introduced) or slow any economic recovery (if they were). Also, I would argue that the economic benefits, if any, would take far longer to have an impact than the costs- so it’s not a good plan right now, even if it works.

So I guess my bottom line is that yes, heathcare reform is important, but for that exact reason it should be done right, which includes having a comprehensive plan to pay for it.

Anyway, I think we’ve spelled out our positions clearly enough – and it’s been fun. I welcome a debate on any other issue that suits you.

Cheers….

Anyway, I figured I’d let Grant have that as the last word. Thoughts?

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One Response to “Debating health policy’n shit with a self-described “paleo-con””

  1. I would go out on a limb and say that a deficient health care system is a legitimate threat to the survival of the state, but then of course, I am just a wacky Canadian with all my crazy liberal ideas.


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