It'd be nice to hear what you think of the second and third sentences of that post.Originally Posted by LittleFuzzy
It'd be nice to hear what you think of the second and third sentences of that post.
Faith is Hope (see Loki's sig for details)
If hindsight is 20-20, why is it so often ignored?
It's not about being 'pure of heart', but whether the politicking obfuscates. The real reasons do matter....like defunding Planned Parenthood isn't really about responsible spending, but an effort to appease the pro-lifers. If it was really about saving federal dollars, they'd fund PP more generously, as a way to reduce unintended pregnancies. Birth control and education are far less expensive than women and children using welfare.
Everyone agrees we need to make some budget changes. This is the kind of thing that's irritating. Shared sacrifice my foot:
General Electric, the nation’s largest corporation, had a very good year in 2010.
But Nobody Pays That
A Lobbying Powerhouse
Articles in this series will examine efforts by businesses to lower their taxes and the debate over how to improve the tax system.
The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.
Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.
That may be hard to fathom for the millions of American business owners and households now preparing their own returns, but low taxes are nothing new for G.E. The company has been cutting the percentage of its American profits paid to the Internal Revenue Service for years, resulting in a far lower rate than at most multinational companies.
Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.’s giant tax department, led by a bespectacled, bow-tied former Treasury official named John Samuels, is often referred to as the world’s best tax law firm. Indeed, the company’s slogan “Imagination at Work” fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.http://www.nytimes.com/2011/03/25/bu...x.html?_r=1&hpSuch strategies, as well as changes in tax laws that encouraged some businesses and professionals to file as individuals, have pushed down the corporate share of the nation’s tax receipts — from 30 percent of all federal revenue in the mid-1950s to 6.6 percent in 2009.
Did they have to pay payroll taxes? (Employer SS) Unemployment Insurance? Property taxes? And of course eventually anyone who owns part of GE and gets that money (dividends, sale of stock) will have to pay taxes on those earnings.
Just curious, but most tax rebates here are taxes you already paid, but it turns out you didn't have to pay them in the end. It is weird if a company like GE doesn't pay taxes, I know for a (99%) certainty do pay them here (for GE healthcare). And I know 100% certain they do pay pallrox taxes here from my colleagues. But keep in mind that a big portion of GE employees are not located in the US (but do pay payroll taxes and SS insurance etc at local value)
@Lewk: you do realise a lot of those people who have to pay taxes on those earnings are not in the USA and do not pay any US taxes, right?
Keep on keepin' the beat alive!
So? And Americans may have to pay income tax on income from foreign sources as well.
And I forgot to add sales tax. They order lunch for employees, oh yeah don't forget your sales tax....
Tax on income is NOT the only form of tax, that is all I was saying.
Lewk, did you read the whole article?
Anyone else think the whole process is being done backward?
Why aren't our legislators on budget committees starting from bare necessities and mandatory basics, things that have to be funded, then working their way down?
Our budgeting process has become too complex for any real prioritization to be imposed on it. No one's made an effort since the 1990s.
The Republican plan today is impressive, and kudos to Rep. Ryan for trying to keep the discussion high-level, optimistic and not blaming the past on any one party. I'm glad they went out-of-the-gate with a full-bore and radical proposal. Will it get passed tomorrow? No. Ever? Who knows. But escalating the discussion of the big issues is critical.
In the short-term, I'm slightly concerned about shut-down.
Dread, the current proposed budget cuts by the Republican party aren't big enough to fix our fiscal picture (in fact they're completely irrelevant for it) but are big enough to derail a recovery and hurt a lot of important programs in the process. It's a symptom of the dysfunctional political environment that both parties are willing to shut down the government over this, but I place most of the blame on the Republicans for this one. It's absolutely criminal that people are saying this budget proposal is even remotely meaningful for addressing our fiscal situation. I can't believe you were taken in by the rhetoric.
I have issues with the Democrats as well - notably, that they are too leery of making substantive entitlement reform - but on this particular budget the Republicans are at fault.
I've only started reading details over the past few hours. The bulk of my praise has been about the rhetoric, but I've been happy with the skimming I've done so far. Care to summarize what concerns you the most?
Major concerns:
1) Non-(defense, healthcare, interest, social security) spending is supposed to be cut in half in a decade, with zero explanation of how that's going to happen. Good luck doing that without eviscerating important programs. It's a large portion of his deficit reductions that has little substantiation in an actual plan and is short-sighted to boot.
2) Revenues are magically expected to remain pretty high coupled with pretty steep tax cuts, but there's little detailed analysis. (The CBO analysis released today of a slightly earlier version of Ryan's proposal just accepted his projections for revenue path when we know it's nonsense).
3) Healthcare costs don't really go down, they actually go up and are shifted to the consumer. Sure, government costs drop some (though not as much as you might think), but it shifts a huge amount of risk and an even larger amount of costs to the consumer. While this may technically reduce the deficit, it's an awful way to do it. Comprehensive reform that drops overall costs (and thus the government's share of it) is the way to go. I also don't get why he wants to repeal the health insurance exchange part of PPACA.
4) There's a lot of obfuscation and lies. Not anything new for Congress, but for someone promoting themselves as realistic and hard-headed, not exactly encouraging. For example: they cite the Heritage Center's rather ridiculous projections on job growth with the plan. They extrapolate a one-year budget and compare it with a multi-decade plan in terms of deficit reduction. For more hyperbole, look at page 7 of Ryan's proposal. It's not a very constructive approach for dealing with the very real problems we face. Also, while the approach stabilizes spending as a percentage of GDP for a few decades (something very laudable), the real savings don't start showing up until the late 30s, which is so far into the future as to be a meaningless projection.
To be honest, the only thing I really like is some of the reforms in the budgetary process, like mandatory spending caps. While I didn't like it entirely, I feel that Bowles-Simpson was far better and much more realistic politically.
Leaving the healthcare issue aside (it's just too hairy), I do agree defense spending must be cut (if that's what you're saying). But it's pretty clear that the intent is to open up a conversation about cutting social security and medicare costs.
As for the revenue picture, the gist seems to be focused on simplifying the tax code, removing deductions/loopholes and collapsing brackets to raise revenue (instead of raising rates).
Having read a bit more between work bursts, you're right that it's not very specific. But I think that's also the point, it's meant to be a conversation starter and signal that everything should be up for discussion [except, apparently, defense spending].
Oh, I forgot! He ignores Social Security. It's a pretty easy fix, but he doesn't even touch it.
I'm not actually specifically saying defense spending must be cut. Oh, it'll need to drop some and there's lots of reforms that can be done to push that through (not least of which is keeping Congress from voting down increases in Tricare premiums or giving soldiers outsized raises during recessions, along with long-overdue reforms in procurement), but you know that I'm generally pretty hawkish on defense spending.
No, what needs to be cut is entitlement spending, but Paul Ryan is doing it the wrong way. He ignores low-hanging fruit (like Social Security), and his solution for Medicaid is to shift all of the costs to states, while his solution for Medicare shifts all of the costs to individuals. That's stupid and not helpful for the underlying problem, which is rising healthcare costs. Sure, it might improve the budget deficit but at a staggering cost to our citizens. Meanwhile, he throws out the baby with the bathwater on things like Obamacare, I assume because of partisan politics.
Meanwhile, his cuts on other spending includes a lot of mandatory and discretionary programs that do a lot of good. While I don't doubt reforms are needed in these programs, the size of the cuts he's intending (50% in the next decade) means there's going to have to be huge cuts in real services with little discussion of which those will be. All Ryan is doing is shifting the deficit and risk from the government to individuals. The purpose of government should be to reduce those risks, not ignore them (or increase them). Granted, our current system just has the government assuming all of those risks and costs, but the appropriate solution isn't to pass the buck but to come up with clever policy that mitigates the risk while keeping costs for everyone down.
As for tax law, I agree he's claimed his tax cuts are revenue neutral due to closing various loopholes. Without more details it's hard to know if he's right, but I think that in general taxes are low enough right now. Closing the loopholes should be done, but extra revenues should go towards our deficit. I'd prefer that income and corporate taxes be lowered through the imposition of a consumption tax, and that in general deficit reduction should be funded about 30-35% by increased revenues.
I'm okay with a conversation starter (though this is obviously flawed in that it ignores large portions of our budget), but we're three months into a budget impasse and don't have time to fuck around with conversations. Furthermore, Bowles-Simpson was a far more realistic scenario (though I'll grant they ignored how Medicare costs would be controlled as well).
We need serious people to solve this problem, and as far as I can tell, Ryan isn't offering any serious suggestions.
Reading it more, you're right that Social Security is entirely missing from this.
Medicaid- I don't think his Medicaid idea shifts costs to the states any more than our current setup does. Right now state budgets are crumbling beneath Medicaid obligations. The block-grant program injects a bit of much-needed flexibility into the system.
Medicare- It's a phased introduction of new programs that could shift more costs to individuals, but that's not totally clear. I ultimately believe we need to first get ourselves to acknowledge that the government simply can't have an open-ended eldercare funding mandate for the next generation of retirees. We're going to have to admit that we can't fund it all and decouple the problems (hope that makes sense).
Wiggin do you think the government providing so many dollars to the health care industry (Obama Care/Medicare) inflates or deflates the cost of health care?That's stupid and not helpful for the underlying problem, which is rising healthcare costs.
Currently, the federal government pays up to 50% of Medicaid costs (the actual percentage is adjusted on the basis of per-capita income in the state in question, I believe). This means that federal spending on Medicaid roughly rises with healthcare inflation. Yet under the block grant system, the amounts of the block grants are only supposed to rise with overall inflation and state population. This is going to rise much slower than healthcare inflation, so the effective federal contribution will drop more and more, leaving states with more risk and higher costs.
That being said, I do like the idea of giving states more flexibility in administering their Medicaid programs and in finding unique efficiencies and the like. One of the great things about our odd federal/state government is that we have 50 different incubators for policies and ideas, so allowing greater autonomy in setting Medicaid policy might not be a bad thing.
You mentioned something like this in EyeKhan's thread as well. If I understand it, you feel that we should first solve our deficit problem by promising less, and then try to make costs rise slower. I have two major concerns with this approach. First, it doesn't make very much sense. Essentially, Ryan has a goal in mind (e.g. X deficit and Y debt-to-GDP at year Z), and he tailored his policies to match. Ignoring policy actions that can drop the cost of programs without reducing benefits means that he has to slash benefits far more than necessary, meaning he's screwing people over more. Also, if the government manages to control deficits in this manner, it has no incentive to develop further policy initiatives to reduce costs, since most of the risk and cost is being borne by others.Medicare- It's a phased introduction of new programs that could shift more costs to individuals, but that's not totally clear. I ultimately believe we need to first get ourselves to acknowledge that the government simply can't have an open-ended eldercare funding mandate for the next generation of retirees. We're going to have to admit that we can't fund it all and decouple the problems (hope that makes sense).
Secondly, I feel like this is wasting a crisis. Healthcare cost growth is the real problem here. Oh, sure, part of the issue is our aging population, but Social Security is a good example of a program whose deficit issues are driven by aging, and the fix there is much simpler since costs only rise with either wage growth or CPI (depending on what we end up adopting in the future). But with healthcare, someone is going to be paying a lot more for services that simply shouldn't cost that much, and the wrong approach is to slash benefits first and then think about fixing the real problem.
I don't doubt that Americans are going to have to realize there are no free lunches and that certain levels of benefits (such as Bush's unfunded prescription drug benefit) are simply going to be cut or modified. Yet a large portion of the savings can be found through efficiencies and policy changes, not through slashing benefits willy-nilly. Promoting one solution while ignoring another is about as stupid as trying to do deficit reduction just by cutting programs and not by raising more revenue.
I feel like Ryan isn't thinking like a statesman, but rather like an accountant. There are plenty of ways to fix our long-term budget problems, yes, and his solution may do the trick. But the cost to public welfare (and the economy) of following his proposals is unnecessarily high. It speaks to slavish adherence to a specific political philosophy rather than a measured approach to complex issues.
All of this aside, I do want to acknowledge that Democratic Congressmen haven't done much better; they haven't offered a reasonable alternative to dealing with our long-term fiscal issues, particularly wrt Medicare and Medicaid. There have been some half-hearted suggestions by some Democrats about a public option, which may reduce costs, but it's not politically feasible and did not feature in the Obamacare legislation. Just as I have serious problems with Ryan's plan addressing the deficit without addressing healthcare costs, I have serious problems with PPACA addressing some of the access issues while largely ignoring healthcare costs.
It can go either way, depending on your assumptions of the alternatives. Regardless, I'm basing my critique of Ryan's plan on a CBO projection he asked them to carry out, which shows healthcare costs increasing, but the US government's share of the costs dropping dramatically.
My point is this. Obama care will allow more people to be insured, hell it requires it. This will *raise* the cost of health care for everyone. An increase in the demand for health care will logically raise the price of it. If someone is forced to pay for health insurance (since they will not have the option w/o paying a fine to do without) they might as well USE that coverage when otherwise they would be content with alternatives.
The biggest problem with health insurance is that it creates an intermediary between the service and the cost of said service. If people price shopped their doctors (like they do for laser eye surgery which is typically not fully covered) we would actually get some competition in the price range. Pay for an expensive test if there is only a 1% chance you might have issue X or decide to put it off. Well if insurance is going to pay for the bulk of it people will go for the test. If they shouldered that additional cost then they would think twice.
Now I'm not saying health insurance has no place but it really should be for catastrophic events and regular check ups/easier to deal with diseases should be out of pocket. Its like buying car insurance for the purpose of oil changes, brake pads and inflating tires. Car insurance is for damage/loss to or of the vehicle not maintenance.
In principle you are right, though the overall increase in demand is probably small. The objective of requiring coverage for everyone is to solve the problem of insurance companies rejecting people with pre-existing conditions, and to spread the risk around.
You can still do price shopping even with insurance - most people have some sort of deductible, and there are lots of ways to make people 'feel' some of the cost of a procedure so they economize. Also, coverage 'in-network' is effectively price shopping, since the insurance company negotiates a reduced rate in-network. Regardless, this is the same problem whether insurance is private or public, and I don't think we should get rid of private insurance. Insurance exists to spread risk around, not to lower costs.The biggest problem with health insurance is that it creates an intermediary between the service and the cost of said service. If people price shopped their doctors (like they do for laser eye surgery which is typically not fully covered) we would actually get some competition in the price range. Pay for an expensive test if there is only a 1% chance you might have issue X or decide to put it off. Well if insurance is going to pay for the bulk of it people will go for the test. If they shouldered that additional cost then they would think twice.
Actually that's a pretty bad idea - covering regular check-ups (and even exempting them from a deductible) is a way to reduce long-term healthcare costs by improving preventative medicine. The analogy to car insurance is flawed; no one really uses their comprehensive auto coverage to deal with catastrophic breakdown of the car's systems when they've ignored regular maintenance; car insurance is used to protect against collisions and liability, mostly.Now I'm not saying health insurance has no place but it really should be for catastrophic events and regular check ups/easier to deal with diseases should be out of pocket. Its like buying car insurance for the purpose of oil changes, brake pads and inflating tires. Car insurance is for damage/loss to or of the vehicle not maintenance.
More people then just those with pre-existing conditions are now going to get health insurance. ObamaCare mandated it or they pay a fine/tax whatever. This creates an economic incentive to get health insurance that was not there before.
And plenty of people "price shop" by going to in-network doctors but that doesn't change how the doctors get paid. There aren't really many tiered levels of service. If I want a steak I can go to my local grocery store, a chilies or an expensive restaurant. Because the patient doesn't pay the bulk of the costs the patient is always going to to prefer the expensive restaurant.
Yes car insurance doesn't cover maintenance. Why should health insurance cover basic maintenance? If you don't change your oil, its your own damn fault when your car bellies up. Hell if you want o mandate catastrophic care insurance only kicks in if you regularly maintenance your vehicle (your body) (kinda like how some car warranties work) with yearly check ups I'm all for that too. Health Insurance should be for catastrophic issues because people can't afford to have those occur and still stay solvent. Regular check ups? Yeah people can afford that on their own. Costs of tests? Let the person use their own pocket book to do this.
I believe we would have a system like that if the government had not skewed the entire market for decades (employer based health insurance due to tax advantages), medicare and of course with the latest debacle.
I agree; I was just explaining the rationale for why coverage was mandated.
Uhm, the patient pays a lot more for out of network, and they also pay a lot more if they're still in deductible. And doctors' pay definitely changes depending on how reimbursement works; so-called 'in-network' doctors are getting paid a lower rate for the same services in exchange for more regular customers.And plenty of people "price shop" by going to in-network doctors but that doesn't change how the doctors get paid. There aren't really many tiered levels of service. If I want a steak I can go to my local grocery store, a chilies or an expensive restaurant. Because the patient doesn't pay the bulk of the costs the patient is always going to to prefer the expensive restaurant.
That's a very short-sighted way to establish policy. Keeping healthcare costs down (which is the purpose of this exercise) is best done by focusing on preventative care. Providing incentives to do so is necessary - either through penalties for failing to get preventative care or through subsidies for that care. I don't particularly care which way it goes, though I'd bet subsidies are more effective at keeping costs down and improving overall welfare.Yes car insurance doesn't cover maintenance. Why should health insurance cover basic maintenance? If you don't change your oil, its your own damn fault when your car bellies up. Hell if you want o mandate catastrophic care insurance only kicks in if you regularly maintenance your vehicle (your body) (kinda like how some car warranties work) with yearly check ups I'm all for that too. Health Insurance should be for catastrophic issues because people can't afford to have those occur and still stay solvent. Regular check ups? Yeah people can afford that on their own. Costs of tests? Let the person use their own pocket book to do this.
I actually agree with you about employer-based coverage. It's ridiculous that health insurance is tied to employment, and that employers get such a ridiculously large tax benefit for providing generous plans (which encourages overconsumption). Honestly I like high deductible plans coupled to HSAs, though I think that's only part of the solution.I believe we would have a system like that if the government had not skewed the entire market for decades (employer based health insurance due to tax advantages), medicare and of course with the latest debacle.
I think this is where we disagree most. As far as I'm concerned, efficiencies and policy changes are either insufficient at the least, or at the most they are de-factor benefit cuts.
I also strongly think the issue can't be mitigated by raising revenue substantially. Ryan actually focuses a lot on this when he talks about the government's outlays as a percentage of GDP. He is very clearly getting us to talk about establishing a theoretical (or legislative) upper boundary, which I think is very healthy. I think the numerical ranges do have to be established first. That's how ordinary corporations and individuals budget, and it's how our government should budget too.
Do you just propose to ignore the issue of rising healthcare costs, then? I think costs growth can be controlled by policy; how do you think it can be done? Part of this policy is obviously linked to reducing incentives for overconsumption, which might be construed as a 'de facto benefit cut', but that's hardly all of it.
Generally the rule of thumb is about a 70-30 rule of spending cuts to increased taxes. I also think these shouldn't be permanent (either all of the cuts or all of the taxes), since obviously there's some equilibrium that things will return to (though I'm skeptical about whether the data about revenues as a share of GDP point to this or not). I personally think much of the taxes will have to happen from broadening the tax base and simplifying the tax code (things Democrats don't like), but I don't think it should be offset by lowered top rates (something Republicans won't like). Our deficit is simply unmanageable in the medium term without either ridiculous spending cuts (which completely eviscerate most government programs) or increased revenues. If you strip out the effects of recession-related spending (and revenue losses), the medium-term gap to close is a few percent of GDP. That's doable without too much pain. The longer-term problem is a much bigger (and growing) one, but that has to be addressed by fundamental reform in entitlements, not slashing government programs in half.I also strongly think the issue can't be mitigated by raising revenue substantially. Ryan actually focuses a lot on this when he talks about the government's outlays as a percentage of GDP. He is very clearly getting us to talk about establishing a theoretical (or legislative) upper boundary, which I think is very healthy. I think the numerical ranges do have to be established first. That's how ordinary corporations and individuals budget, and it's how our government should budget too.
I do agree that the government should target expenditures to a proportion of national income, and should also have deficit and debt targets with automatic penalties built in for violating these targets. Yet I'm not sure that targeting revenues to a proportion of GDP is a good idea - it's very hard to control. Even ignoring revenues, there are perils associated with such limits. For example, government revenues dropped like a rock during the recession but expenditures (due to automatic stabilizers) rose sharply at the same time that GDP dropped. This is expected, and part of countercyclical spending patterns.
In short, I think that better rules for budgets and deficits are a good idea in general, but they need to give the government some room to maneuver in times of need. Perhaps they could use a multi-year budget or some complex averaging formula to 'borrow' expenditures and revenues from one year's budget; I don't know. Maybe deficit targeting could strip out the effects of automatic stabilizers and focus only on other programs. There are a lot of interesting ideas out there, and that's the one bright spot I see in some of Ryan's proposals.
They could create a War tax. Or re-instate the draft. Assuming public outrage would keep a lid on military expenditures, that would save trillions. That could be used to prioritize educating more health professionals. Maybe offer debt-free Med school (in general practice, family medicine, OB/GYN, geriatrics) in exchange for 4 years working in elder care facilities or low income clinics, as salaried providers. Help start ups connect high-tech digital networks, for consultations with specialists, making it easier and less expensive for the consumer. Expand role of Nurse Practitioners and PAs. Fund non-profit NGOs for mobile clinics and health ed. Require more K-12 life science/health/nutrition/sex ed classes.
Regulate the hell out of the private for-profit Insurance Industry middle men. Regulate the hell out of 'ambulance chasing' lawyers. Create a private-public board to screen validity of malpractice and personal injury suits before they see a jury or court room. Decouple insurance from employers. Offer a public option. Consolidate Medicaid, SCHIP and Medicare into one large group, with means-testing. Allow gov't to price bid on pharmaceuticals and import from other countries when cheaper.
On the plus side, Obama finally feels compelled to at least make it look like he thinks cutting spending is an urgent issue: http://www.nytimes.com/2011/04/11/us...11deficit.html
Will see what is in this "plan". But I can predict the biggest lie we'll hear: that somehow raising income on the "top earners" is enough to cover everything.
I can also predict one thing. You''ll hate it whatever the plan turns out to be. As indicated by the "" you pre-emptively put around plan.
And the article you quoted states: 'Mr. Obama, by contrast, envisions a more comprehensive plan that would include tax increases for the richest taxpayers, cuts to military spending, savings in Medicare and Medicaid, and unspecified changes to Social Security'. Your "prediction" of tax increases for the richest taxpayers is included in the article, and it also names other ways to reduce debt, so also that implies that Mr. O'Bama does not seem to claim it would cover everything.
As we heard the Republican talking heads vigorously state that there would be no compromises (since that would look bad towards their base) I think this is a valid concern.Several presidential advisers interviewed in recent weeks said Mr. Obama has been torn between wanting to propose major budget changes to entice Republicans to the bargaining table, including on Social Security, and believing they would never agree to raise revenues on upper-income Americans as part of a deal.
I could have had class. I could have been a contender.
I could have been somebody. Instead of a bum
Which is what I am
I aim at the stars
But sometimes I hit London
No, my major problem is expecting massive revenue increases to balance our budget. I'm not pre-judging the plan he seems to be putting together in about five days. I'm just saying some of the assumptions will probably be unrealistic.
Last edited by Dreadnaught; 04-12-2011 at 01:07 AM.
Well, that's not what you said.
No comment on new stance, back in the peanut gallery for me.
I could have had class. I could have been a contender.
I could have been somebody. Instead of a bum
Which is what I am
I aim at the stars
But sometimes I hit London
Now that Obama's anticipated speech has been given.....who wants to comment?
Haven't had a chance to find if there was any proposal beyond a speech.
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