Archive for September, 2012

US Healthcare, Taxes, and the 99%.

Dean
Dean
Fri Sep 14, 2012 10:30 pm by Dean

As you can see from the title of this essay, I will be writing here on a matter of some importance, regarding the current climate of US politics which will connect to the recent events concerning Paul Ryan’s nomination by the Republican Party to run for Vice-President of the United States. And also, a rebuttal to some common arguments often made in his defense, as I understand them, because of course, many such people exist. I invite those members of the League of Reason forum who are from (living in) the United States in particular, to give me some feedback on this topic.

See here: http://www.rollingstone.com/politics/blogs/taibblog/tax-cuts-for-the-rich-on-the-backs-of-the-middle-class-or-paul-ryan-has-balls-20110407

Indeed, it’s relatively well understood that Republican candidates of various sorts have somewhat of a history of backing ethically and/or logically indefensible positions, and it seems from a cursory scan of his views and proposed policies (I am unsure if I comprehensive catalogue of his and Romney’s views is available) that a vote for Ryan&Romney will result in a rather alarming series of (likely stupid) policy-decisions, namely: anti-social-welfare, so-called “cut-throat”-capitalism, plutocracy, and (perhaps) legislated religious instruction of some manner, though let’s hope not…

Perhaps his economic stance is not all that surprising, when he is apparently an apologist of Ayn Rand‘s political philosophies:

“‘Public welfare’ is the welfare of those who do not earn it; those who do, are entitled to no welfare.” Ayn Rand (in Atlas Shrugged, 1957)

Economics aside, on the social front, he has also stated that “[He] believes ending a pregnancy should be illegal even when it results from rape or incest, or endangers a woman’s health. He was a cosponsor of the Sanctity of Human Life Act, a federal bill defining fertilized eggs as human beings, which, if passed, would criminalize some forms of birth control and in vitro fertilization.”
And this is just the one the one issue that immediately springs to my mind. Not to mention his views on drugs, gay-rights, and climate change, among other things, and I doubt that he accepts the theory of evolution, somehow, and it seems likely that all of these views are going to affect his policies in some way or another.

And while I realise that Obama has shown himself to be rather inept when it comes to economic issues in general, I haven’t seen any solid evidence that either Ryan or Romney are a significant improvement, and his “published plan” is risible indeed. I don’t believe (as he clearly does, and as a great many of his supporters do); that Obama’s actions are slowing economic prosperity. Because for a start, the most atrocious drop in credit over the last 70-80 years or so will take (likely) years yet for everyone in the United States to creep out of, and that would include almost everyone who makes some impact, e.g. home-owners, consumers (obviously), big and small business entities alike, and of course banks, etc. And with the developments in e.g. housing, I can almost guarantee that consumer-demand will improve. Owing to increased equity that buyers and sellers will use for improvements and suchlike. At this stage it’s hard to tell what will happen exactly.

Obama’s … populist ideologues (or seemingly so); have caused quite a lot of controversy in recent months, and are likely to last until November, but of course, when someone complains about this, it’s worth reminding them that in a first-world democracy such as the United States, the governing body of the state is (at least in principle); supposed to respond fairly to the needs of the population, if that makes adequate sense. And this is where the 99 per-cent come in, though bear in mind that I am referring to the “really existing” 99 per-cent, not the politically fanatical so-called “99 per-cent”.

First, I would like to start a serious discussion of taxes; which may then be continued in the Blog of Reason comments-section; for those of you who have chosen to read this far in, and are interested. And of course this is because the issue of taxation has become a somewhat urgent issue of late, especially in the campaigns. I have some distant family living in the eastern United States, who I have been in communication with via the internet for a significant number of weeks, regarding this topic, as I was curious at the time, and they gave me some much needed information. Suppose, for example, you earn between $6,000 and $7,000 per year, on a net of (for the purposes of argument, again); $25,000  amounting to approximately 26% federal tax rate. As far as I am aware (correct me if I am wrong on this): Mitt Romney’s effective tax-rate was 15%.

Though I should add: workers who are self-employed of which there are a great many get to take that 15 per-cent anyway, meaning a horrid obstruction to any potential job-makers who isn’t already in the “Tea Party” mindset, as many of the US Republicans are. The evidence all seems to point to the fact that the smaller and less recognised business-entities take on markedly more workers than any other business-category (or group) does; yet the majority of the tax-burden tends to be bestowed upon individual operators with little to no available capital to contribute.

To say nothing of this being grotesquely unfair (not to mention profoundly stupid, and anti-competitive) it seems flagrantly obvious that the Democrats (flawed as their own policies may be at present in many regards); do have a valid point when they speak of these disparities, and the fact that huge businesses have succeeded in almost completely externalising the costs of maintaining the infrastructure on which their financial survival depends, to the poor and the workers. Specifically, people who don’t have obscenely expensive legal and accountancy departments to help them horde their earnings (capital) after having already effectively circumnavigated income-taxes on capital-gains as almost all distinguished Republicans tend to do. And still I wonder if Romney & Ryan’s visions of so-called “business-amicable” tax codes work as a means of increasing the rate of productive investment? Merely type “Reaganomics” into any search-engine, so that you can see what I mean.

An equitable and evenly distributed tax-burden (“pay your fair share” encapsulates this theory, I feel), would not be inherently anti-business. It would be sound, fair, and logical. I must stress that the issue is not about being anti-corporation, or anti[/i[-big-businesses. It’s about being pro-fairness. What’s more, is that criticising Obama for not having a jobs-plan as many have done, and as Paul Ryan’s superior (Romney) has done is nonsense too! After all; we could critique possible [i]flaws in his plan, but one does in fact exist, as the above-linked article points out.

“In his news conference, Romney emphasized four ideas in his plan: expanding domestic energy production, working out trade agreements with Latin America, cracking down on China and cutting the corporate tax rate. These are all reasonable ideas. But working out trade agreements takes a long time. Getting the Keystone oil pipeline up and running takes a long time. Rewriting and implementing a new corporate tax code takes a long time. Changing China’s policies takes a long time. It’s difficult to see how any of these ideas creates a substantial number of jobs quickly.

Obama also tends to emphasize four parts of his plan: increasing infrastructure investment, hiring more state and local workers, doubling the size of the payroll tax cut and adding a new set of tax cuts for small businesses and companies that hire new employees. Two of those policies imply directly hiring hundreds of thousands of workers. The other two move money into the economy immediately. It’s easier to see how these policies lead to more jobs and demand in the short term.

In terms of the deficit, the Obama administration has put forward a specific set of ideas mostly by eliminating itemized deductions for wealthier Americans to pay for its plan. The Romney campaign has not yet said how it will cut corporate and individual tax rates without increasing the deficit.

In a sense, what’s really interesting about the Romney and Obama plans is that they don’t conflict with one another. Obama has a set of ideas for boosting job creation now. Romney has a set of ideas for long-term economic growth. You could implement all of Obama’s 41 bullet points and all of Romney’s 59 bullet points simultaneously. There’s nothing about increasing infrastructure investment that keeps you from cutting corporate taxes, for instance.”

Source

Also this:

“Paul Ryan has been a fan of sequestration for his entire career in the House. He has repeatedly called for discretionary spending caps backed by a sequester. On August 1, 2011, he got what he has always wanted. Now that the sequestration might actually take place he says it’s “not good government.””

And this….

… And so forth.

Now onto the issue of medical costs:
Net cost relative to the true medical expense(s) should remain relatively stable for the foreseeable future at least, from much of the evidence that I’ve seen. At least, the overall expense of the health-insurance system in place should go down. I’ll bet that in order to get good employees, businesses are off-setting the lack of insurance with higher wages in at least some cases, in all probability. And while it is indeed mostly accurate, that the ACA requires additional coverage(s) for various reasons, remember that kids (or their parents) will have to pay into the system to get coverage for them or the kids, and apparently the point of that was (1) so that these same people would not go uninsured, and/or (2) such that they make few withdraws on the healthcare system, which was supposed to remunerate costs for insurers!

It is equally accurate that insurance-industry/industries’ (over)reaction to ACA was (or is) also a large contributing factor. Yes, there is a real market uncertainty, and insurers need to insure themselves against that (ha!). But the increase in insurance-provider(s)’ profits since the passage of PPACA have been breathtaking, even as insurers themselves have caused or increased deductibles and cut-payouts, etc. That’s what they call a “parlay”, as far as I know…. hmm…

In fact the covering of…25 or 26 year-olds for example, is obviously going to cost something. The ACA requires them to be on a plan, but doesn’t force their parents to take them. So the end-bearer of the decision will have to be made amongst families themselves … as with most things in the “science” of economics, estimates fluctuate somewhat wildly depending on which numbers you trust, but here’s one that puts it at 2.5 “M” (million). What complicates matters is also the fact that existing conditions are enormous by comparison. Here for example, a Forbes contributor claims that… err… “adult-children” (?) inclusion causes merely 1-3% increases in premiums.

When it comes to government’s role in controlling large sectors of the economy, it’s worth keeping in mind that insurance, at least as it is in the US, is rather like a banking entity. You can only seem to find a loan (insurance) when you don’t need it (or access to much medical care) and unfettered, unregulated capitalism of the kind supported by Republicans like Mitt Romney and now Paul Ryan, proved itself insufficient to fix the problem either. It is time that the United States joins the rest of the first world with regard to healthcare.

The insurance companies are on-the-whole; usurious to charge vastly more than is actually necessitated by the increase in their operating expense. Insurers must all have at least some idea of what will happen to their overall expenses upon the time when they are forced to cover all of the people to whom they had previously denied coverage previously (for very well-studied reasons, indeed)! They’ve denied people coverage because they knew what the costs would be.

At this rate (no pun intended) we could very easily see a re-run of what happened with Pell Grant: educators simply ended up raising tuition at a rate commensurate with that payable by the average pupil, and thus direct health-care providers could do the same …but that’s another story. Also slightly troublesome is the fact that it is actually illegal in the US for healthcare providers to do some extremely simple market-research. It is illegal for e.g. an allergist or a dermatologist to even ask what any given competitor(s) charge for equivalent procedures.

And as for the actual costs, here is something I found quite easily off the internet:

A remaining question is whether other aspects of the ACA might also have contributed to the premium increase. Kaiser argues, plausibly, that the two factors it considered were the most direct link between the ACA and 2011 premiums. But perhaps there were indirect links as well?

I expect we will hear critics of the ACA make exactly that argument in the days ahead. Somewhat surprisingly, though, the first example I found came from the Administration. Writing on the White House blog, health adviser and deputy chief of staff Nancy-Ann DeParle pins some of the blame for higher premiums on insurance companies overestimating what their costs would be:

[list][2011 health insurance] premiums were generally set in 2010, when insurance companies thought medical costs would be significantly higher than they turned out to be. The Bureau of Labor Statistics found that the health insurance employer cost index (a measure of the price of health care services) was the lowest it has been in over 10 years in the first half of 2011. Additionally, some insurers assumed that the Affordable Care Act would dramatically raise their costs. In the end, both assumptions were wrong, but insurance companies still charged high premiums and earned impressive profits. Wall Street analysts’ review of results from the first quarter of 2011 found that 13 of the top 14 health insurers exceeded their earnings expectations, with profits that were over 45 percent higher than estimated. (emphasis added)

DeParle thus believes that the ACA did lead to higher premiums in 2011 beyond what can be explained by direct cost increases, but only because insurers overreacted. In other words, the ACA did cause premium increases beyond what can be explained by costs (since insurers would not have made the mistake about ACA costs otherwise), but the ACA doesn’t deserve the blame for those premium increases.[/list]

Source: Health Insurance Premiums Skyrocket

Some would argue that the rest of the first-world (as I said above) are being held back from economic prosperity through their government-run services…such as healthcare.

Not so.

Per capita healthcare-spending:
http://www.kff.org/insurance/snapshot/images/OECDChart1.gif
http://www.kff.org/insurance/snapshot/images/OECDChart2.gif

http://www.kff.org/insurance/snapshot/oecd042111.cfm

Look at the outlier in the above graph, Norway. A country that spends more on universal-healthcare than any other country that has it and still almost a third less (per recipient) than the US. There are obviously a plethora of reasons why nations that do indeed have universal healthcare may fare better or worse than others, but think about it logically: all of them, are spending half as much per-person than the United States is, on GDP and healthcare! Not to mention that judging by these countries’ average life-expectancies , they’re receiving somewhat improved treatment to that of the US in several important respects, and as such; I’m sure that they (countries with universal healthcare) are all VASTLY more productive, as well. (If you look at the list linked here, notice that the three countries ahead of the United States all have a more productive healthcare-system. Whether these are correlated is not clear, but I would think so). In summary, universal healthcare while expensive is clearly not nearly as expensive as its absence, and the US is an archetypal example of what happens in its absence….

[center]http://cdn.theatlantic.com/static/mt/assets/international/assets_c/2012/06/mf%20healthcaremap%20p-thumb-615x314-91612.jpg[/center]

The above map shows, in green, countries that administer some sort of universal health care plan. Most are through compulsory but government-subsidized public insurance plans, such as the UK’s National Health Service. Some countries that have socialized and ostensibly universal health care systems but do not actually apply them universally, for example in poverty- and corruption-rife states in Africa or Latin America, are not counted.

What’s astonishing is how cleanly the green and grey separate the developed nations from the developing, almost categorically. Nearly the entire developed world is colored, from Europe to the Asian powerhouses to South America’s southern cone to the Anglophone states of Australia, New Zealand, and Canada. The only developed outliers are a few still-troubled Balkan states, the Soviet-style autocracy of Belarus, and the U.S. of A., the richest nation in the world.

See: http://www.theatlantic.com/international/archive/2012/06/heres-a-map-of-the-countries-that-provide-universal-health-care-americas-still-not-on-it/259153/

Some weeks ago, I watched Paul Ryan’s Vice-President Acceptance Speech (VPAC); and it seems to offer some horrifying prospects indeed, for America. The mere thought of this man being a mere heartbeat away from occupying the Oval Office (Romney too); is quite scary indeed. A line from William Shakespeare’s Richard III keeps echoing in my brain “Woe to the land that’s govern’d by a child!” I am tired of his cliched and grossly rhetorical approach, and as far as I could see, he laid out no discernible outline plan detailing his “solutions”. And after watching Romney’s acceptance-speech sometime afterwards, I cannot help but speculate that the “Grand Old Party” would be significantly better equipped with Condi as their candidate. Innumerable vapid banalities on “the ‘promise’ of America”, and so much outworn, tedious elocution about what it means “to be an American”.

I found this segment in particular to behighly disturbing:

 

      “And I will guarantee America’s first liberty, the freedom of religion.”

 

      [APPLAUSE]

 

      “President Obama promised to begin to slow the rise of the oceans. And to heal the planet.”

 

      [LAUGHTER]

 

      “My promise is to help you and your family.”

 

    [APPLAUSE]

….
So…legislated Christianity (as I highly doubt that either Romney or Ryan intend to protect the Wall of Separation, or indeed the establishment clause), and uncritical denial of anthropogenic-climate-change….

So far as I can tell, that’s just about it. And the events observed since then on this topic, have been less than appealing as well. I’m struggling to see anything other than destruction to come out of these events, if these people are elected to public office (as President and Vice-President)… if there are any point that need clarification, or for example, their chances of being elected (may be discussed); please do so…

Thanks for reading.

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