James Pethokoukis

Politics and policy from inside Washington

Becker on on what healthcare reform should look like

Mar 30, 2010 19:28 UTC

An amazing piece of healthcare analysis by the University of Chicago’s Gary Becker. The whole analysis deserves reading, but a few key points:

1) Out-of-pocket spending accounts for only about 12% of total American spending on healthcare, whereas the share of out-of –pocket spending is over 30% in Switzerland, a country considered to have one of the better health delivery systems. Partly because of this major difference, health care takes 11% of Swiss GDP compared to the much higher American percentage. … As far as I can discover, nothing in the new bill really tries to raise the out-of-pocket share, and some changes would reduce it even further.

2) Another desirable reform is to reduce the reliance of the American health system on tax-deductible employer-based insurance since tax deductibility has encouraged low deductibles and low co-payments. … The bill does propose to phase out tax deductibility for the more expensive plans by 2018, but who knows if that will ever be implemented.

3) Health savings accounts (HSAs) have been one of the most important innovations in the health care field during the past decade. … There is little mention of HSAs in the new bill, and certainly no encouragement to their expansion.

4) The American health care delivery system needs greater transparency and easier access to medical information by consumers. The bill takes a valuable step in this direction by encouraging the development of online medical records and medical histories for all individuals, no matter how many doctors they have seen, or how often they have moved.

5) Proponents of the bill claim it will save hundreds of billions of dollars during the next ten years from cuts in Medicaid and Medicare, but it is far from obvious how such cuts will materialize. … . I do not see how the bill will lead to Medicare savings since there is no increase in out of pocket payments by Medicare enrollees, and Congress is likely to continue to override any scheduled cuts in payments to Medicare doctors and others.

6) The only truly efficient way to handle the pre-existing condition issue is to try to develop an insurance system in which young adults, who generally have few serious existing medical conditions, can take out long-term healthcare insurance.

7) Although the impact on the costs to taxpayers of the more than 40 million uninsured persons in the US is usually greatly exaggerated, I do support a requirement that everyone has health insurance that covers medical catastrophes.

Waste, fraud and abuse at Social Security

Mar 30, 2010 16:57 UTC

The super-insightful Andrew Biggs looks how the Crist-Rubio debate dealt with Social Security — and finds laughable the former’s comments about restoring the system’s long-term solvency by rooting out waste, fraud and abuse:

As a general rule, when a politician mentions “waste, fraud, and abuse” it should be interpreted the same as if the candidate wore a sign saying “I’m not serious.” That’s not to say that we don’t have problems with fraud, but that the real problem is simply that the government spends too much.

This is particularly so in the case of Social Security, which is one of the most efficient federal government programs. Social Security takes money from young workers, calculates a benefit for retirees based on their earnings and their years in the workforce, and cuts them a check. There’s not a lot of discretion involved, which reduces chances for things to go wrong. Sure, there are problems in the disability program and I’m confident there are folks getting disability benefits who actually could work. But that’s the fault of the eligibility criteria passed by Congress in the 1980s more than any problem of vetting applicants by the Social Security Administration. On this issue, at least, Crist was very unimpressive.

What did impress me, though, was the fact that Rubio—who, after all, is running for the Senate from Florida—was willing to be upfront about the hard choices awaiting us on Social Security. In part this may be due to the character of the candidate, who struck me as a principled conservative.

COMMENT

First Older citizens paid along with their employers out of their own monthly earnings into the social security retirement insurance. So those checkks being cutare what we paid into. It is not taken from younger workers. The government stole what older workers paid into for their retirement and illegally took it for war. This was money that did not belong to the government it is not nor has it ever been entitlements not any more than if someone opens a bank account to save for their future and the banker steals it for his own use. Theft is theft and the government had no right to steal social security insurance paid into by workers of years past.

A lot of the waste is done by social security administration workers who do not follow their own rules and demand recipeints follow them and who waste time and paper who work but do not want to work. Pigs at government trough. Go sit in a SS office someday or employment office or DSHS office and watch how many “Breaks
” they take and if you watch close some play computer games and eventually when they feel like it call someone to their desk but they are lazy and NOT earning their wage. Most are like this. They get paid too much money and do NOT want to help. Most also are rude and act we are taking money right out of their pocket. When it is money WE paid into it is NOT their money and they would not have a job but for SS or unemployment paid insurance paid by employees and employers. People get mad at the wrong people and think we are not entitled to it. YES we are we PAID into it out of our hard earned wages and long hours of work.

Posted by celanith | Report as abusive

7 keys to financial reform

Mar 30, 2010 16:53 UTC

Here is what you need to know about financial reform. If a bill in any way allows vast amounts taxpayer money to be poured into banks, then the bill does not end Too Big To Fail. Banks will assume this power will be used. Second, any bill that requires prescience by regulators and then the will to act on unpopular forecasts is doomed to fail. Keep that in mind as your read some key insights from the great Nicole Gelinas on fin reform:

1) The biggest financial crises arise from too much debt. Borrowers and lenders, ensconced in a bubble, fail to see the need for cash as a cushion against error. When the bubble bursts, it leaves behind so much debt that it bankrupts the financial industry.

2) Existing regulators should move toward consistency in their borrowing limits–requiring a financial institution to put a consistent level of cash down behind any debt security or derivative instrument, even if the government thinks the investment is perfectly safe, as it did with mortgage securities.

3) Further, existing regulators should wean financial companies off their reliance on the cheap overnight debt that they borrow from global markets to fund their investments.  … Regulators could require firms to put down greater cash cushions proportionate to this borrowing.

4) These rules would encourage the most important regulation of all: market discipline. Individual companies would still fail to meet their obligations, but they would not bring down the entire financial system in the process.

5) Instead of adding to Dodd’s 1,336-page bill, Washington should repeal the 2000 law that forbids existing regulators to set consistent rules for all derivatives instruments.

6) Then, Washington should tweak the bankruptcy code so that, for example, financial firms can go bankrupt without giving their creditors the right to pull their derivatives contracts, destabilizing the financial world.

7) We need politicians and regulators to implement simple rules that don’t require faith in omniscient, micro-managerial government planning.

Me: I would also add that there is a great need for financial transparency by Wall Street so markets can better judge their creditworthiness.

COMMENT

It could have aided dilute not just racism as is taking place now but also homophobia. The guy has a lot more talent than any other idol I’ve observed. He places inside a 100% effort into all his performances unlike Kris.

  •