Friday, March 23, 2012

CNBC Hit on Affordable Care Act


Revealing discussion this AM on CNBC about the Affordable Care Act I guess aka "Obamacare".  I don't even know what so-called "Obamacare" is, which is interesting as if you listen to opponents of it, "Obamacare" is supposed to be holding up a lot of business decisions and somehow holding the economy back.  I've never understood this opinion as I would bet 99% of real business people don't even know what it is.

Well, anyway, there is some edifying discussion in the hit below.  Taking the opposing view is former Presidential advisor Lawrence Lindsey.  First, Lindsey complains that the act is "incoherent" (but then he goes on to explain it, which is revealing), then he opines that this act will have the unintended consequence of many businesses deciding to pay a $2,000 "fine" and letting their employees just go join the public system.  This he looks at as a problem and a "disaster for the federal budget" .  How can the federal budget suffer a "disaster"?).




It's interesting as he does a quick calculation based on 50% (BTW I think it will be MUCH higher) of those currently receiving health benefits via their employer being put into the public plan, and this will result in an additional $140B in federal outlays based on the Federal government paying the additional $4,500 per employee.  This is really the only complaint that Lindsey has, ie the additional projected $140B in fiscal outlays.  Somehow this is supposed to be a "disaster for the federal budget".  Please.

This is "chump change" to the federal budget; and there is no problem with the federal government providing these fiscal outlays via keystrokes.  In fact the federal government could provide much, much more.

Mike has already reported today downthread, that the federal outlays have been cut by $397B so far this fiscal year; WHERE IS/WAS THE CONCERN WITH THIS REDUCTION IN OTULAYS; if Lindsey is going to get all worked up about a projected $140B annual increase?  What about a $400B decrease morons?  Do you think this has no effect?

If this is the only argument that opponents to "Obamacare" can come up with, ie that it stands to be a "disaster" for the federal budget (whatever that means); it is no argument at all.




29 comments:

beowulf said...

Assuming that $4500 is net of the $2000 penalty revenue, don't forget also that corporate income that would otherwise be paid out as tax-exempt premiums would be taxable (either to the company itself or if paid in higher wages, to employees).

The CBO estimates that insurance premiums to be a $3T tax exemption (against both 1040 and FICA) over the next decade. If we cut the use of that tax break by 50%, well, I'm dubious there will be any net cost to the govt.

Matt Franko said...

Beo,

Good point! Might even be 'revenue neutral" (which is actually BAD)...

Resp,

tom h said...

Interesting that the some 2000+ page document was written in Harry Reid's office at 2:00 a.m. one morning. Wow! Old Harry and team are very prolific writers. And all this time I thought it took a couple of months.

Matt Franko said...

Tom, Maybe they are fast typists? Or are using speech recognition?

;)

jeg3 said...

Don't have much more to add:

"The U.S. spends twice as much as other industrialized nations on health care, $8,160 per capita. Yet our system performs poorly in comparison and still leaves 50 million without health coverage and millions more inadequately covered.

This is because private insurance bureaucracy and paperwork consume one-third (31 percent) of every health care dollar. Streamlining payment through a single nonprofit payer would save more than $400 billion per year, enough to provide comprehensive, high-quality coverage for all Americans."

http://www.pnhp.org/

Mario said...

the only real "objection" to health care is federal budget projections blah blah blah nonsense. In other words, there is no reason to NOT provide health care to our citizens. Period. In the long run for our nation, we would be setting up the infra-structure for a solid service industry that could put a dent in losses in manufacturing in the US. A win-win-win in my book....except of course we'd be out of money by 2020 and our grandkids would be SWAMPED in paying back bonds to China!! What'a a little American boy to do!?!??!

Matt Franko said...

Right Mario that is all they have come up with so far ie 'debt doomsday'

Best to remember current GOP patriarch Dick Cheney's advice in this case too: "deficits don't matter".

It would not be surprising if we could get FD that Lindsey's consultancy is under contract with the health insurance industry.

" who, being past feeling, in greed give themselves up with wantonness to all uncleanness as a vocation." Eph 4:19

btw as far as health care, he could stand to drop more than a few pounds. In all seriousness at his age to have all that mass, he isnt going to make it... it would have been better for him to be up early doing some light to moderate exercise under a Dr's supervision to get some weight off rather than a satellite feed to CNBC spewing BS on national healthcare policy...

Resp,

John T said...

While I agree with the other commenters here and with Mike's assessment, could we not solve the issue by increasing the penalty.

That's assuming that Congress really want the ACA to work and are genuinely worried about the additional costs.

Matt Franko said...

John,

govt has to provide all settlement balances and net savings in any case.

So for instance if we would 'increase the penalty', govt sector would have to provide balances to the non-govt sector to 'pay the penalty' first, then the non-govt sector could pay them back to the govt sector as a "penalty".

No one in the non-govt can pay anything back to the govt without govt first providing the balances to the non-govt.

So for instance Warren's health proposal is for govt to provide balances to all US persons say on Jan 1, and then these US persons could go acquire healthcare services using these balances from the healthcare industry for the rest of the year....

Resp,

John T said...

Matt,

Thanks for the explanation. I doubt that Lindsey (or most of Congress) would understand that concept.

Mario said...

oh they would understand it all right.....it would be "inflation" and "skew the markets" if we did such a hap-hazard thing. Duh!!!!

Instead let's allow insurance companies to dictate access to health care and produce NOTHING for our society other than useless admin jobs....that reminds me.....who said the JG couldn't work b/c it would distort the markets?!!?!? Of course the "private" sector is so efficient and effective. what a crazy way of seeing things.

Mario said...

honestly all Austrians and MMT-ers HAVE TO READ (AND REALLY UNDERSTAND) Henry David Thoreau's essay called "Civil Disobedience." It is an absolute MUST, b/c it addresses the issues of the size of government, the role of the individual in society, and the path to Freedom on earth in the most detailed, direct, and comprehensive manner I think I have ever read in modern literature. He addresses all the issues Austrians and MMT-ers ultimately fight over, which is the role of government in society versus the role of the individual, etc. I re-read this great piece today and I was in awe how much it relates to the philosophical issues MMT-ers and Austrians and Libertarians and America at large today are grappling with and attempting to resolve in good conscience.

It is even more fascinating that it was published in 1849 while Marx's communist manifesto was published in 1848. I do not know if Thoreau knew of or read Marx at the time (though I suspect he would have)...either way the parallels in the ideas are striking indeed. Most people don't realize that Marx was more democratic than socialist, and he looked to the Freedom of America both on paper and in geographic possibility as a model for Europe to follow. But that's really another story for another time.

And to whet Matt Franko's whistle...check out the last couple paragraphs of "CD" where Thoreau talks about the New Testament and what I believe is an allusion to the New Jerusalem in the last line of the entire piece.

Arguably one of the most powerful and potent political and civil documents ever written.

http://sunsite.berkeley.edu/Literature/Thoreau/CivilDisobedience.html

Matt Franko said...

Mario,

great reference there... I'm reading it.

Here is a quick interesting take:

"Christ answered the Herodians according to their condition. "Show me the tribute-money," said he--and one took a penny out of his pocket--if you use money which has the image of Caesar on it, and which he has made current and valuable, that is, if you are men of the State, and gladly enjoy the advantages of Caesar's government, then pay him BACK some of his own when he demands it. "Render therefore to Caesar that which is Caesar's and to God those things which are God's"--leaving them no wiser than before as to which was which; for they did not wish to know."

HDT gets some of the details of the Roman state currency system wrong...

BUT HE WAS IN PARADIGM! ie he knew govt spends FIRST and then we pay the govt BACK ..... SOME ... via taxes... we lost this knowledge somewhere along the way since then.

Resp,

Anonymous said...

"If this is the only argument that opponents to "Obamacare" can come up with, ie that it stands to be a "disaster" for the federal budget (whatever that means); it is no argument at all."

Cost is not a viable argument to Obamacare, as MMT has shown. However, any individual who enters into an agreement with the state for health care has to wonder, in the end, whether they will be giving up control over their person to a set of rules, made up by unknown persons, that may dictate, for one, what drugs I must, not may, take, in order to maintain a level of "health". My fear about Obama care is that all kinds of therapy or drugs could be mandated, without the choice of refusal, once the initial agreement to accept care is made. The real life examples I can site are of those parents, who having refused chemotherapy for a child, were then arrested for negligence, after which the child was compelled by the state to complete the required doses of chemo. The issue in those cases (there have been multiple instances of that example) of the state stepping in and making the decision regarding what is appropriate care should give pause to those who promote government health care.

Matt Franko said...

Mario,

Here from the last pgh: " I please myself with imagining a State at last which can afford to be just to all men, and to treat the individual with respect as a neighbor; "

This would be anathema to anyone who would think that a policy that would use the NAIRU as a "tool" to foment so-called "price stability" was a just policy. HDT to me here takes it down to an individual level, ie policy has to address the condition that ALL are left in, not just some majority.

Our policy makers at this time are content to think that "ONLY" 15-20M of our fellow countrymen are unemployed, these people do not really concern them as there are still plenty of others that have employment and corporate profitability is at all time highs and the S&Ps are 10% away from a new high, etc...

As far as the New Jerusalem, Christ's millennial reign, I think your insight is correct that at some spiritual level HDT was on to it here in his conclusion....

One thing I feel absolutely sure about is that in those days He will not be using something like the NAIRU to promote 'price stability'. LOL!

Resp,

Matt Franko said...

Anon,

that's a good point, these are the kinds of issues that should be debated, not this BS that Lindsey brings up.

The only issues are real, not fiscal.

Resp,

Matt Franko said...

Mario,

Here's another good one from HDT there:

"For eighteen hundred years, though perchance I have no right to say it, the New Testament has been written; yet where is the legislator who has wisdom and practical talent enough to avail himself of the light which it sheds on the science of legislation."

From Paul: "14 For whenever they of the nations that have no law, by nature may be doing that which the law demands, these, having no law, are a law to themselves,
15 who are displaying the action of the law written in their hearts, their conscience testifying together and their reckonings between one another, accusing or defending them
,
16 in the day when God will be judging the hidden things of humanity, according to my evangel, through Jesus Christ."

Where are these people in govt here in the nations today? Who manifest "the action of the law written in their hearts"? Not present imo. NOWHERE to be found, we are left with ALL MORONS.

HDT is right when he writes: "No man with a genius for legislation has appeared in America. They are rare in the history of the world. There are orators, politicians, and eloquent men, by the thousand; but the speaker has not yet opened his mouth to speak who is capable of settling the much-vexed questions of the day."

Same situation then as it seems today.

Resp,

Tom Hickey said...

anon, I am on Medicare now and chose the regular program rather than an HMO, I have never had an issue with either the "government-run" program or with Blue Shield, which provides my supplemental. Choice of doctors and facilities is up to me, not an insurance adjuster, as it was when i had private insurance. Also no pre-existing conditions to be concerned with. I have used my benefits is different parts of the country without question by a provider and no insurance red tape to deal with. Anyone who thinks that will get a better deal through a private insurer had really better rethink that position. There has been all sorts of FUD sown by the anti-government crowd, much of outright lies, like death panels.

On the other hand, my sister-in-law chose the HMO program instead of Medicare, and now she has to deal with a private insurance company approving doctors, hospitals, and even procedures. The HMO add-ons may look attractive, but the hassle comes along with it. Not something she needs to deal with in her 80's.

Perhaps others can offer contradictory experience, but I dealt with Medicare previously when my mother was aged and couldn't handle her own affairs any longer. Again, many years and zero problems. She got second opinions, switched doctors when someone didn't get it right, and no one "from the government" ever made a sound.

There's a reason that old folks like Medicare. It works for them, and most of them had experience with previous insurers that was often less than satisfactory.

Tom Hickey said...

BTW, Matt, tom h and Tom Hickey are two different people.

Mario said...

you got it Matt. Glad to see you're enjoying it. ;) And yes I agree that legislators quote is really quite resounding.

The irony is that in order for a greater society we need both greater individuals as well as a greater government; not necessarily "larger" government or "richer/louder" people but definitely greater. There is a chapter in Walden Pond called "Higher Laws" and it is also worth the reading. Here's a great quote from the chapter:

I found in myself, and still find, an instinct toward a higher, or, as it is named, spiritual life, as do most men, and another toward a primitive rank and savage one, and I reverence them both. I love the wild not less than the good.

tying together seemingly contradictory poles is exactly the type of challenge before us as a nation and people regarding the "size" and "scope" of government, corporations, and individuals.

Mario said...

Anon you state:

However, any individual who enters into an agreement with the state for health care has to wonder, in the end, whether they will be giving up control over their person to a set of rules, made up by unknown persons, that may dictate, for one, what drugs I must, not may, take, in order to maintain a level of "health".

That is exactly what an insurance company does.

Tom Hickey said...

Mario, Thoreau is reiterating Plato's position on rulers in The Republic. According to Socrates, as Plato reports, they must be fitted for the position of rulership with wisdom as well as knowledge, not be interested persons, and be in tune with the higher spiritual law that is structured in reality rather than human subjective bias and the conventions it creates. It is not known whether this position was original with Plato (Socrates), since the idea of the sage are rule is already present in the Pre-Socratics, notably Heraclitus, and it was greatly antedated in the East. Interestingly, the West as not only ignored Plato's view, but repudiated it as leading to "statism." Read carefully , Plato is discovered to be saying that every other form of government tends to statism. Only the rule of the wise and personally disinterested can avoid this fate. Otherwise, there will be a contest over fame, fortune, power and pleasure, which are the chief motivators of the ignorant, who are unaware of the who and what they are as human beings and act as brutes instead.

Tom Hickey said...

Fmr. Reagan official: Health care ‘broccoli mandates’ argument is ‘totally bogus’

A former Solicitor General appointed by President Ronald Reagan says that the conservative argument that the heath care reform law would eventually allow the government to force people to eat broccoli is “totally bogus.”

Florida’s Republican Attorney General Pam Bondi and others have insisted (PDF) that if the Affordable Care Act’s individual mandate is allowed to stand then the government could eventually also require people to “buy and consume broccoli at regular intervals” because it would positively impact interstate commerce by making consumers healthier.

Fox News host Shannon Bream on Sunday asked former Solicitor General Charles Fried if this argument would hold up in court.

“It’s totally bogus,” Fried replied. “Because, as Judge Sutton pointed out, everybody isn’t in the working out market or in the broccoli market, but everybody is in the health care market — or 95 percent of the population. So, they’re not being forced into a market they’re not in. They’re being told — they’re being regulated in how they pay for things in a market that they are already in and are sure to continue to be in.”

Matt Franko said...

I would point out that in general so-called "Obamacare" is out of paradigm as it imposes a "fine" on business in order to "help pay for it" which relies at core on the false "taxpayer on the hook" mentality.

This shows again the terrible advice Pres Obama is getting from his economic crew...

Resp,

Tom Hickey said...

"Hands Off My Health Care!" (This Message Brought to You By the Health Insurance Industry) by Wendell Potter, former ins. co. propagandists and now a reformed crusader

Hands off my health care!

Remember those words from the health care reform debate of two years ago? I'm confident we'll be seeing them on protest signs in Washington again this week as the Supreme Court hears arguments on the constitutionality of the Affordable Care Act. And we'll see them again when the protest campaigns shift into high gear this summer.

One of the rules of effective communications is to keep it simple. In attacking something you don't like, use as few words as possible, and make sure those words pack an emotional wallop. That's why lies about "death panels" and a "government takeover" of health care have been so potent. Unfortunately for those advocating reform, it's far more challenging to explain and defend a law as complicated as the Affordable Care Act.

Maybe, then, supporters of the law should co-opt the "hands off" slogan and make it their own. That would require adding just a few more words here and there to make clear what would be lost if the law is repealed, gutted or declared unconstitutional.

"Hands off my health care! Granny doesn't need her meds all year anyway!"

"Hands off my health care! Who cares if insurers refuse to cover sick kids?"

"Hands off my health care! My 24-year-old daughter can just stay uninsured!"

"Hands off my health care! If I lose my coverage because I lose my job, so be it!"

"Hands off my health care! It's not my problem if your insurance company dumps you when you get sick!"

Tom Hickey said...

Affordable Scare Act

On August 21, 2009, while the Congress was in the heat of the debate over the health care reform bill that would eventually become the Affordable Care Act, Rep. Steve Scalise (R-La.) stood on the House floor and told a terrifying story of America's certain future under health care reform. Scalise darkly warned of "health care rationing," and cited something that had happened just the day before in socialist-healthcare loving England.

"When you look at the bill, you start to realize what they're doing and proposing is the very government takeover where rationing of care would exist where a government bureaucrat can get in between the relationship of you and your doctor," Scalise said. "It's the same thing that's happened in Canada, the same thing that's happened in England, where unfortunately just yesterday, we saw the story of a 22-year-old, who was denied life-saving care, denied a transplant by this government bureaucracy that exists in England that rations care."

The story sounded scary enough, and it was perfect for the fearmongering needs of the moment -- provided, of course, that nobody bothered to check on what had actually happened.

Matt Franko said...

Tom,

All of the whole "rationing" argument goes out the window if you can forfeit the "taxpayer on the hook" mentality... it's just a derivative of Lindsey's "fiscal disaster" scenario.

Here we are again, impediments to many needed policy changes hinge on a continuation of the "taxpayer on the hook" falsehood...

btw which HDT in this essay, shows how he was NOT a moron on this issue... It looks like he was refusing to pay taxes, but NOT to withhold "money" from the Govt ("then pay him BACK some of his own"), but he correctly understood that non-payment of taxes to him was a protest to the govt authority...

resp,

Tom Hickey said...

Matt: :he correctly understood that non-payment of taxes to him was a protest to the govt authority..."

Agree. This is the essence of civil disobedience. It sends a message that government has lost authority in violating its mandate conferred by the social compact.

The social compact is about trade-off and opportunity cost. The trade is individual freedom (state of nature) for freedom of self-determination as a society under the rule of law and government based on public purpose (state of civilization). Of course, there is some loss of individual freedom but there is supposed to be a greater gain in the advantages of civilized life so the indifference curve shifts. Those for whom it doesn't are "outlaws" and they seek out "outlaw areas."

When rulers violate that implicit compact, they lose their moral authority to govern and civil disobedience rises in repudiation.

Civil disobedience takes two forms, protest and lawlessness. Protest is a cry from within the system to restore the rule of law and public purpose. Lawlessness is an abandonment of the system as not working. When protest and civil disobedience rise in outcry, so too does lawlessness increase as many people just take matters into their own hands and decide to make their own way.

Mario said...

great discussion here guys. The key to HDT's thinking in my view is the subtlety of it all. When we simply and rightfully exercise our rights as men and look not to government, neighbor, or authority for permission, we are being civil, great, and most likely dis-obedient to someone or something somewhere.

Libertarians seem to need government to not exist in order them to exercise these rights. Not even HDT thinks that is smart, but rather to differentiate between one's freedom (liberty) and one's luxuries and fashions and to act accordingly. That takes great discernment and rigorous honesty and courage...even in the face of jail-time as was his case, and it makes me think of the OWS movement when he states this:

if one HONEST man, in this State of Massachusetts, ceasing to hold slaves, were actually to withdraw from this co-partnership, and be locked up in the county jail therefor, it would be the abolition of slavery in America. For it matters not how small the beginning may seem to be: what is once well done is done forever.

Perhaps we MMT-ers can do this "once well done" so that is lasts forever and for all.