Campaign 2012 Obama Domestically

A continuing description of the candidates in several aspects of the job.  I am putting this up, not for your benefit, but for mine. I am soliciting your comments in the hopes of improving my own perspective.

See also Campaign 2012 Obama Foreign Policy for thoughts on that.

In domestic policy the thing that I wanted from Obama was NHI (= national health insurance.)  I would have preferred that it be a single payer thing and that the financing be honest.  See YA NHI1 and YA NHI2 

Of course we did not get NHI, but we got ACA which I consider to be a giant step in that direction.  We also did not get a fiscally sound system.  The second shortcoming of ACA is part of the more general fiscal problem.

With respect to the giant step.  I believe that we have not had NHI because of our system of employer provided health insurance.  People are afraid of what they do not know and so they cling to what they have.  The ACA offers employers a very good deal if they decide to not offer health insurance to their employees: a $2,000 “fine” instead of a $5,000 to $15,000 health care plan.  Hmmm - I wonder which they will choose.  Within a few years there will be far less employer provided health insurance.  Shortly after that we will have national health insurance.

I give a lot of credibility to the argument that we were in a very deep hole when Obama came in.  We are coming back.  They tell me that when the recession comes from a failure in the financial industry, then the comeback is slower. 

I understand that Obama could not get any more stimulus than he did, but it should have been spent on infrastructure rather than tax cuts (Republicans) and bailing out state governments (Democrats).  [Just on that thought, I too am a national debt worrier.  Perhaps even a "Krugman denier".  But there are limits.  Scheduled, short term debt is different.  More and more people are pointing out the lunacy of our not taking advantage of the following:  we have high unemployment, major infrastructure needs, and money that the Fed. Govt. can borrow for 10 years at less than 2%.  When the gods make you an offer that you can’t refuse, don’t refuse it!  We could borrow and spend a trillion dollars, earmark Obama’s tax on the rich (or something else) to pay it back over ten years. You can do that for a total interest cost of 11% of the loan.]

I blame the Republicans for the profligacy of continuing the “Bush tax cuts”, the Democrats for the subprime mortgage fiasco which the government financed and which has not yet been unwound, and both of them for constructing a financial system which includes entities which were too big to fail.   They have not fixed any of these things.  (Capitalism without failure is an oxymoron.  If a company is too big to fail it is too big to exist.  Break it up.)

The GM-Chrysler thing is something that I cannot judge – whether Romney’s direct bankruptcy and then refinancing was essentially the same as Obama’s except that the unions got a special deal from Obama which was funded by the government. (We still own a lot of GM.)

Obama’s attitude toward business worries me.  Like so many liberals he gives the impression that, if he had his druthers, he would really like to have his capitalism without so damn many capitalists in it.  The context from which his little “you didn’t build it” line came is more troubling to me than the line itself. “You say you worked hard.  There are a lot of hard workers out there.”  Seriously, what exactly is the conclusion that we are going for here?  (If you are going to answer this, go a little deeper than – “there is luck involved”.  Who among us does not know that there is luck in life?)  Seriously, if you were going to talk to people about what goes into starting a business, wouldn’t you at least mention risk?  And it is not just business.  A lot of successful people had to take risks to be where they are.  For example, if you are a doctor then you have all of the costs of the ten years of schooling beyond HS and the cost to live during those ten years.  But, perhaps the biggest thing is that you go for those 10 years without earnings, without building up any savings, without building up any equity in a home.  And nobody guarantees that you will actually become a doctor.

The main negative for Obama in this area is the fiscal problem.  I believe this is a very serious problem.  Not just the “fiscal cliff” that you hear about on TV from those who don’t know the difference between the debt and the deficit.  I mean the long term short fall.   I am not convinced that he takes it seriously. 

We the people have been borrowing and spending all of this money, not just in the recession, we have been doing this for years.  Who is doing it:  the “great middle class.”  That is the POWER in this country.  Who will speak truth to POWER? The politicians have been pandering to that POWER.  Listen to how often all of them talk about how they are going to protect the great middle class.  It is a constant pandering which is hard for us to hear because they are pandering to US. 

The left wants a larger government.  An honest liberal will tell me (or at least give me a signal) that to achieve his vision (with fiscal responsibility) we will need serious tax increases on the middle class (as well as the rich).  I have not heard that from Obama.  In fact what I have been hearing from Obama is a litany of promises to maintain all of the goodies that the various groups get from the government.

The right wants a smaller government. An honest conservative will tell me (or at least give me a signal) that to achieve his vision (with fiscal responsibility) we will need to cut some programs that are dear to my middle class heart and pocketbook.  I have heard that from Romney’s first choice: Paul Ryan.

grade B (revised from a C 10-9-12)

Tax medicare as income

To the receiver of Medicare it is insurance (very good insurance I might add).  That insurance has a value which can be calculated in a simple way (or complicated if one wanted to).  The government gives me that insurance like it gives me SS.  In the case of SS the govt computes how much I paid for it and  calculates the rest as income.  We should do the same for Medicare.  (I would do the same for any insurance paid for by an employer.  But that is another question.)

It is simple "fairness".  If you work you pay taxes on the income.  If you win the lottery you pay taxes on the winnings.  If the government gives you healthcare insurance, then you should pay taxes on it.

Notice that it is elegantly simple and also progressive.  This income would be taxed at the taxpayer's highest marginal rate.  Someone with enough income to pay at a higher rate would pay more.  I would pay (considerably) more.  However,  the poor (including a lot of our mothers) could add the value of their healthcare onto their income and still not be owing any income tax.

The proceeds should be placed in the Medicare Trust Fund.  It would go a long way to solving medicare's  long term problems and be quite progressive without the onerous label of "means testing" medicare.

If you have not heard about this proposal, that is because it would hit the biggest sacred cow in the American tax universe:  THE MIDDLE CLASS.

The reason both sides offer pixie dust solutions is that they want the public to believe that they are the ones who can solve the money problem WITHOUT hitting the middle class.  I do not believe it.

Of course the rich should pay more per person than anyone else,  they do so now, and they would pay even more with this proposal.  But you can't get it all from them.  The tax  loopholes uh "opportunities" that are owned by the middle class are huge:  untaxed healthcare, mortgage interest deductions, child deductions, and charitable contributions.  These are called tax expenditures and they are defended vigorously by all of the middle class's agents in Washington i.e. the politicians.

Of course, this is not a complete solution to the fiscal problem.  But it would be a significant step.
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Milton Friedman On The Robin Hood Myth

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Who are the payers and who are the beneficiaries of government programs.  Here is some analysis:

Milton Friedman On The Robin Hood Myth 

that every good liberal, conservative, and all those others interested in politics or economics should hear.

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Fairy Tales

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Thou shalt not follow a multitude to do evil;... Exodus 23:2

In this case the evil is that each side imagines that there is a simple solution if "they" would just do what "we" know that everybody should.

The Tea Party thinks that it is "over taxed." In response to the taxation question ("How much of one's earnings should a person be able to keep?), one of them recently said that you should be able to "keep all of what you earn". Zero taxation! Next they will ban death.

The Occupy Wall Street group apparently wants free stuff. (A sign said, "Free Health Care.") How to get it? Take it from the rich. I asked a liberal friend, "If you took all of the money the rich people had and gave it to the poor, then who would the poor work for?" You know the answer that I got: "If they had all of the rich people's money, then they wouldn't need to work."

Another group, another fairy tale.

Fairy tales are why we don't have compromise. Each side is so convinced of its own fairy tale that it is certain that, in the next election, the rest of us will finally wake up and realize how stupid that we have been all along not to see things as they see them. Then of course we will give them enough power to fully implement their "dream scheme".

Have you noticed how the right's description of the OWS is eerily similar to the left's description of the Tea Party? Substitute mob for racist and you have updated the complaint.
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National Health Care 3

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Most of the time the advocates of national health care have taken an all or nothing approach. Medicare being the huge counter example. Have you ever wondered what would have happened if they had taken a gradual approach at other times?

After Medicare was done in the sixties what if the supporters of national health care had simply extended it to children under 18? There were several times in the seventies and nineties when the Democrats controlled the President, Senate and HR. Kids are not too expensive and an equal opportunity argument could have been made.

Maybe next you could include all of those who had ever been in the military service for the country for 5 years. Then their families.

Now imagine the consequences. After they passed 18 all of those people would be accustomed to having had health care all of their life.

Surely they would be more inclined to support a full scale "medicare for all."

Healthcare 2 - another view

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Vince offered a different point of view on national health care the other day. Since the original post was so long ago June 11, 2010, I thought that I would just put Vince's comment up here as a new post.

There is a central point that is generally ignored by those who favor National Heath Care. Here, a maxim from the philosophy of Libertarianism is needed.

There can never be a right to health care. Any so-called right whose implementation is dependent on the seizure of money or property from one man to another can never be right. It is nothing less that inflicting slavery and tyranny upon one man from another.

To put it simply, if you come to my house carrying near lifeless, sick child in your arms, I will do my best to give what I can and seek to raise the rest from the voluntary charity of others.

But if you come with the determination to take by force, if necessary, what is needed to save that child, you are no better than a common thief and robber and should be treated accordingly.

Despite the slow poison of government interference, (i.e. Medicare and Medicaid), what is left of the free market in medicine in this country has produced the highest quality medical care in all human memory.

Problems of access can only be solved by the slow elimination of all price distortions of government granted health care and a return to the original principles of the free market.

If you scoff at what you might say as simplistic solutions, go to the Cato Institute. There you will find detail plans, showing what a true free market in medical care would look like.

Vince, March 16, 2011