Book of the Month

Michael Maiello's picture

Is Obama Giving Up?

Over the weekend, Austan Goolsbee went on the chit chat shows to tell people that the economy is out of the emergency zone, that slipping into a Great Depression is no longer what we all fear and that the government isn't going to do anything else dramatic to put Americans back to work, to say nothing of raising wages and living standards.

So... this is the recovery?  This is it?  Obama seriously looks at America as it is now and shrugs?  Or maybe he'd like to do more but doesn't think it's possible with the Republicans in congress, or maybe he thinks the debt is the right issue right now or maybe he doesn't believe that there's anything left to be done.

Atrios says that the Administration is now looking for unemployment slightly below 8% by the end of 2012.  To my mind, unemployment in the high 7s at the end of next year is evidence of continued crisis.  It will mean continued stagnant wages and continued diminishment of the American standard of living.  We simply deserve more growth than that and if the private sector can't provide it, then the government must.

It also seems to me that Obama can't go into 2012 with an aloof, "everything's fine" or "we've done all we can do," message.  I tend to be better on policy than politics but this kind of attitude actually reminds me of the one that turned George HW Bush into a one-termer.  I'm not predicting Obama's fate here (I don't see a star like Clinton emerging from the Republican ranks) but Obama is striking me as either lazy, unimaginative, uncaring or just completely out of touch.

I didn't see the shows, so I can't judge for myself, BUT that's a pretty disappointing stance.

I would be in favor of a WPA-style set of programs, but how you get spending like that past the Republicans is something else. Right now, they can blame the lack of jobs on Obama and don't have to take any of the blame politically.

A real approach to the housing crisis would also provide a boost. Right now, people are delevering and not spending. If we could bring all mortgages (taken out within a certain period of time) in line with CURRENT home values, that might help.

How we get corporations, flush with cash, to hire more people is a mystery to me.

I suspect there's no political will (between the two parties) to do what actually needs to be done -- we have to modify and restructure debt within the private economy.  That means your mortgage idea but even other ideas like reducing people's outstanding consumer, car and student loan debts.

A real approach to the housing crisis would also provide a boost.

There were, and still are, 50 billion dollars in TARP funds earmarked for helping homeowners, of which only two billion have been spent. Apparently they don't know how to spend the money in an equitable manner.

Also, the administration doesn't seem willing to force the banks to take a haircut on principal for underwater mortgages, so that excludes the idea of bringing all mortgages in line with current home values. There was also a window for refinancing mortgages at the new and lower interest rates provided by the fed's loose monetary policy (which could have cut monthly payments 20%). But, again, it would have required pushing the banks to accept refinancing even without haircuts. And that didn't happen, since the banks make more money off banking services such as late fees, foreclosures, etc.

yrs,

former dag dog

striking me as either lazy, unimaginative, uncaring or just completely out of touch.

Yeah . But you know he isn't any of those.Well, maybe uncaring, 

that could easily be the case.But before any of the other adjectives I'd consider machievellian as a possibility. At least I hope so. It's worth considering that alternative and what might follow from it.If Obama's economic team indeed thinks we're slipping into a Great Depression  what would we expect them to have Goolsbee say?

 OMG we're slipping into the GD

 

or

 the economy is out of the emergency zone, that slipping into a Great Depression is no longer what we all fear 

 

at least he didn't say that the fundamental economy is sound. That would really terrify me.  

I suspect that they honestly believe that the Depression risk is over.  I actually believe that, too.  But I think a double dip recession is possible or, more likely, a prolonged period of unacceptably low growth.

Maybe Obama is just aiming to hit a historical double: the first African-American Democratic president and the first African-American Republican president.

Seriously, the guy is just a politician.  Changing direction now and opting for a more activist policy would require him to admit that he made a big mistake by pivoting in 2010 away from stimulus and toward long term budget issue.

One thing that we can be relived about is that since Obama has locked up the money and support of business leaders by adhering to his passive, centrist path, it won't be necessary for ordinary folks to donate to his campaign this time around.   That's a good thing, because none of us can afford it.

My son told me yesterday that his impression is that none of the young people in his generation have any real hope that the future is going to get significantly better.  They think America is past its peak and in permanent decline.  And he's one of the relatively lucky kids at a good college with prospects that are probably better than 80% of Americans.

I don't know if his impression of his peers is entirely accurate or not.   But I think it's not far off.  How is it that Barack Obama - Mr. Hope - has ended up presiding over a country plunged into fatalistic passivity and gloom?  Remember, hope isn't just a matter of where things are, but where people think they are going.

I think that notion that the U.S. is past its peak levels of growth is pretty common.  I don't actually share that, though it's more that I don't think we have to be past our peak.  We might be, if we collectively decide that we are.  And I do think that people's expectations are frustratingly low.

Your son is smart and Obama ended up being the harbinger of doom because that's what he always was to begin with.  He worked for the big shots before he was elected.  He works for them still.  And to hell with your son and his generation: he's got his.  He's just another scumbag, sellout politician like his mentor Mayor Rahm.

"We simply deserve more growth than that and if the private sector can't provide it, then the government must."

I think the focal point needs to be that the private sector can do it.  There are a lot of companies sitting on a lot of cash reserves.   Sure it would be a little more risky investment than if the economy already indicated it was picking up steam.  But it is time for them to step up and take the risk - as corporate citizens. 

Everyone here seems to generally agree there is no political will in DC for any investment large enough to actually move the needle on employment.  What is actually possible is developing incentives for the companies to step up which doesn't just end up translating into greater profits for the executives and shareholders. 

Companies don't make decisions with their money and their shareholders' money based on some gauzy notion of corporate citizenship.   They are geared to thrive and succeed and improve their positions, and they respond to economic circumstances as they perceive and understand them.   It's up to government to modify those circumstances if the prevailing circumstances are not conducive to investment and growth.   You want companies to behave diferently?   Use the powerful yet dormant tools of government to change the laws or change the underlying macroeconomic trends.

Companies would invest their money and hire more workers if they thought that they could grow and make money by doing so.   But under present circumstances they can't, because none of their customers have any money to spend.

After decades of destroying the American dream for half of the country, here's the environement we're in:

http://toomuchonline.org/madison-ave-declares-mass-affluence-over/

Companies don't make decisions with their money and their shareholders' money based on some gauzy notion of corporate citizenship.   They are geared to thrive and succeed and improve their position.

I question the distinction between their money and their shareholders' money Legally it's all the shareholders, practically it's all the companies'.Nor do  I thnk there is even a gauzy notion of corporate citizenship .In the course of a  couple of hundred board meetings not only did the subject never come up, you'd have been considered distinctly odd  if you raised it.   

Corporations "feel" they're being good "corporate citizens" if they are doing well financially. That's about it, as far as I can see.

There is a long history of the notions of corporate philanthropy and corporate social responsibilty.  Over the past decades the trend has been for these to be taken over by the marketing departments where corporations look to ensure that every good deed is leveraged for its PR impact, which is of course tied to increasing profits.  This has become more and more so as corporation lose their connection and ties to a specific local community and the people who live there.

Even still the notions have not completely disappeared.  And there are those who point out that social (and environmental) responsibility are linked to profits and improved positions in their particular market, as this WSJ article addresses.

But I also think that we tend to think just about the "fortune 500 companies" when we talk about corporations.  There are a lot of companies that employ 100, 250, 700, 1000 employees.  Some are still privately owned and are not driven by the shareholders.  These companies do tend to be more community minded since the executive teams work and live in the same place as the people they employ. 

There also seems to be a tendency to characterize anyone who sits in those board rooms as heartless and souless.  Yet people like Flavius are sitting in those board rooms, people who do care.  So maybe it isn't that huge of a challenge to break the silence so it wouldn't be odd to talk about these things, but the norm.  The behavior of corporations has not been kind to the American worker of late, nor to the economy.  But it might be possible that a shift can occur so that companies and the individuals that guide them respond to the current situation in a similar fashion to the way US companies responded to the war effort during WWII.

And for the latest news - one can check out the Corporate Social Responsibility Newswire

Yup.

I know it really ruins the standard blogosphere narrative to get into this (the one how all the evil corporations don't give a damn what people or communities think,) I learned that there is such a job in corporate world called "Community Relations Manager." I know only because I have a close relative who is one. Last time she came to New York was for a big convention of such peeps, it did appear to me from what she said about her convention and her field that there are a lot of them and growing and they are not getting laid off in this economy like one might suspect.

A little primer for those as initially ignorant as me:

Community Relations Manager Job Description/EHow

[....]

Outcome

      A community relations manager is able to maintain a positive image for the company and keep the company involved in the community. If the job is done right, the community will perceive the organization as a part of the neighborhood and will support it as such.

Salary and Job Outlook

      According to Salary.com, the average median salary for a community relations manager is $83,044 in the United States. By 2016, the average growth for a community relations manager should increase by 12 percent. These jobs are very competitive. Having experience or participating in an internship program may be very beneficial to achieving a position.

[...]

More of an idea here:

No day 'typical' for a community affairs manager, Atlanta Business Chronicle

and here:

The Corporate Volunteer Council of Atlanta supports member companies in their strategic commitment to workplace volunteerism and civic engagement.

Now one could certainly argue that this is all a load of crap and why don't they just willingly pay higher taxes and let the government take care of stuff like this rather than hiriing people to improve their image as engaged citizens concerned about the health of a community.  But that would be arguing that they should stop caring what people and communities think, wouldn't it?

You're describing a public relations job.

Sign up and do your partiotic duty, protect America Corporations?

Although you'll never get rich, You'll have money in your pockets joining Blackwater.

What are we fightin for, dont ask me I dont give a damn"

Now American companies overseas can get back to business.

Plenty of workers working cheaply, Plenty of buyers for cheap goods

Qaulity? ........Hahahahahaha 

Quality of life? .......Hahahahahahaha

Corporate America has taken the opposite lesson -- they laid off millions of people and productivity soared.  They're not going to spend money hiring when they can get the same output for less and they're not going to increase output until they see a surge in demand.

Doing exactly what the shareholders would expect, And arguably a good thing,per se, because it lowers costs, potentially prices , thus making goods available at cheaper prices.That's the appropriate role for a company. 

The role of the government is to manage the econmy so that increased demand results in these efficiently operating companies re hireing the idle workers. If ,as I  continually harp, marginal tax rates were more progressive, much more,  that tax revenue could be employed addressing our infrastructure needs thus providing that demand.

The problem is not that companies are doing what they are supposed to, it's that the government is not doing what it's supposed to.

I yield to no one in my knowledge of and criticism of the illegalities and outright cruelties of which companies are capable. But I don't criticize them from doing what they are supposed to do.

Yes that is true if left to their own accord.  That is why there needs to be both government incentives and public pressure for them to act against their first instincts.  It would take some imagination to develop and provide highly publicized partnerships with the government which would enable them to expand in the future.  I think the point is that it's not just look at our options as being between creating more government jobs or stand around and wait for the private sector to make their business decisions.

With the evidence of a double-dip in housing prices worse than the Great Depression (33% v. 31%), and no bottom in sight, millions out of work, and 40% of college grads flipping burgers, etc. if they can find any work...the MOTUs are brilliantly working on austerity and the debt.

And Goolsbee is in effect, tossing the live grenade to 'business'.  Just like poor Hilda Solis.

If HAMP didn't help homeowners about to default, or in default, but funnelled money to banks via loan servicing and other fees instead, and the Fed is busy fighting inflation instead of trying to stimulate employment...and lending money to banks at zero %, and buying back debt from the banks at a higher rate, what are we to think?

I don't know how it works, but couldn't Obama have told The Ben Bernank that there had to be strings on the loans?  If Obama did have any sense of how bad it is out here, and how bad it's likely to get, wouldn't he or someone in government be jumping up and down demanding that the only way out is government spending?  Don't forget that real unemployment numbers are almost double than what the Labor Dept. calculates, according to most smart economists. 

It just can't turn around on its own.  (With all due respect to those who believe 'getting a handle on the debt' will work some magic.)

 

Just heard that Goolsbee is gone.

Looks like it's so; crikey.  Not gonna go down with the ship.  Hmmm.  When I googled, one of the hits was at a site that showed this pic with the news, caption says:

"Row Goolsbee, you bastard! Or, the Obama Admin. will take us down with it!

Set a course for the Ivy-league coast. That's where the other survivors went. We'll catch a train to Chicago from there."

                                    

It is obvious that Nader is the proximate cause of Obama's failure to do anything.

Under normal circumstances, Obama would fear a left-wing revolt given the current economic conditions, and would do something for the working class. But the Nader morality tale - sanctimonious leftists cause war, terror and pestilence - that is recounted at every such occasion serves to snuff out any such left-wing revolt. So Obama has nothing to fear from the left and moves right - cutting spending to please corporate interests and the wealthy.

By a similar course of reasoning, Nader is clearly also responsible for my excessive consumption of cheetos.

So DOWN WITH NADER.

I usually blame my cold sores on Nader, but once I learned they could be triggered from too many incomplete proteins like beans, I skip to Obama and his economic policies and lack of prosecutions of criminal fraud...since hamburger meat is even too expensive some weeks now. 

Pardon me.  I know that we should eat less meat to save the planet; but once in awhile I do get some Carniverous Cravings, and get a little funked out when there is only Bean Pie to eat, and my lovely little hand-built house, the only thing of value we own or might have passed on, is worth 33% less than four years ago, yet the taxes are rising and rising....

But shhhhhhhh; Oct 6 may well be a people's movement in DeeCee; I'll post it sometime so the Dagbloggers can laugh at me for promotoing Street Activism.  As usual.   Innocent

Uh yeah!

Destor, it's time everyone faced the fact that Obama is not a Democrat.  He ran for office as a Democrat but he's really a Barackocrat.  He doesn't give a rats ass about anyone but himself and his policies as President speak loud and clear on this.  At heart he's a Republican but as a black guy he knew he could not be in their party and succeed as he has done with the Democratic label.  Has he given up?  He gave up once he was elected.  His entire Presidency has been devoted to the exact opposite of what he campaigned on.  His motto in the election was change you can believe in.  But he was lying.  He has done nothing but serve faithfully and consistently the interests of the very same persons and organizations he got elected saying he would change.  His candidacy was a Trojan Horse and he has virtually destroyed not just the left in America that was just starting to gel when it lost it's mind to drop all its efforts and elect him, but also the Democratic Party as it has been known since 1932.  Under his "leadership" the Democrats have been turned into nothing but a pale and not quite so barbaric imitation of the Republican Party.  It is sad in many ways, but mostly for the young who are now going to get a first hand look at what America was like pre-FDR and it was an ugly place indeed.  But the difference will be that the opportunity and booming economy will not exist and will never return. 

Thanks Mr. President for doing in  two and half years what the rotten, right wingers of the Republican Party were unable to achieve in 60 years.  I'm so glad we trusted you to stand up to the powers that be and demand change in our politics.  What a fraud.

Just to keep the chronology straight between his nomination and his election the economy collapsed. Easy to date it, it was in Sept 08 when Ken Paulson got down on his knees to beg Nancy Pelosi to cooperate. That did make a bit of difference.

Hank, but who cares?  Goldman Sachs CEOs seem fairly ubiquitous.

But sorry; Obama owns the economy now, and his hands-off attitude is pretty cavalier.  Oops, hands-off except touting the importance of debt reduction and austerity.  Nader's fault.

He owns the economy, certainly politically, and is responsible for what he's done or tried to do and not. But it's silly to divorce the present from the immediate past. As a politician, he can't go around complaining about Bush, but what he inherited is still having a major impact.

This wasn't just a big downturn. The major drivers of this economy, consumers, got wiped out. Many lost their jobs and homes.

That just isn't going to come back except, perhaps, with a massive New Deal-type effort. But even if the stimulus had been 1.3 trillion--who knows? I, personally, would have been in favor of it, but I'm not sure anyone really knows whether it would have brought the economy back, or how far back.

Can't he?  ;o)

http://thehill.com/homenews/administration/115271-a-year-after-claiming-...

Did you read the HAMP links?  Has he shifted directions on anything that hasn't worked?  Has he listened to economists other than neoliberals on his team?  What would having him "care" about the plight of American non-elites and the next couple rungs down look like to you?  Just curious.

If you want to quote an article almost a year old, okay.

In any event, I wasn't arguing that he hasn't, just that it doesn't make sense to.

I skimmed a few, but haven't had time to read. Second question, I don't know. Third question, I also don't know (do you?)

Fourth question, doing things that brought back the economy and made it fairer. I actually think he's attempted to do that.

I made the smiley face because he had; can't even blame him for it.  And no, no one can prove what might have happened if the stim money were double or triple, or if meaningful mortgage mods had been made, and not given to the banks instead... or la la la la...but we can sure do some damned good guessing.

I won't try to touch the 'are we broke and need serious debt control now'; better economists here than I can talk to you about what sort of debt leverage against GDP can be as long as the next debt is productive.

Or how that Obam'a wars have contributed to (yep; it's true) even more unemployment; that's another whole subject.  Fairer.  Massive bank profits v. ... Hmmm.  I'm going to bed.

It's important to understand that Obama fundamentally agrees with the Republicans on economics and does not believe in the New Deal approach to putting people to work.  He has explicitly made this clear on a number of occasions withot directly dissing FDR.  He quotes Ronald Reagan more than the quotes all other Democrats combined.  Obama is not interested in putting people back to work.  He's only interested in doing whatever he has to do to get re-elected so he can focus on getting himself a really cushy setup with the Wall Street crowd when he leaves office.

The economic collapse made no difference whatever in what Obama has done in service to his masters: the wealthy and powerful.  It should have made a difference.  Any halfwit who knows the history of the New Deal could understand that this was a full blown economic disaster requiring bold action.  The only bold action we got was Obama shoveling money into Lloyd Blankfein's pockets along with his fellow crooks on Wall Street.  Obama is every bit as out of touch with the needs of the common people of this nation as Bush ever was.  He's just got more style and saavy.  He sucks all the same.

I can only think of ad homines.

I'm far from an economist, Destor, but I think the argument needs to be joined at the level of the big questions which become sort of background common "wisdom."

The big one now, to my mind, is the question of whether we are or are not broke. Whether we have to do something about entitlements now to avoid a trainwreck in a few years.

Other images like the analogy between a family's finances and government's play into this, and the whole austerity line depends on this.

Unfortunately, conservatives have captured this flag. They wave the 14 trillion in people's faces; people naturally get worried because they can't even comprehend those numbers, but shake in their boots imagining what it would be like to have 14 trillion on their credit card.

Everyone, except a few voices in the wind like Krugman and the MMT people, bow to this notion that the 14 trillion is an immediate danger and must be addressed right now.

So with that in the background, it's hard to generate any will for the government to do anything because this overriding "fact" drowns out everything else.

This should be a factual question answerable by ascertaining the facts--but these days, everyone has his own facts.

Krugman, Brad Delong, Skidelsky, Martin Wolf, Samuel Brittain all say that the current level of deficit would only be a problem if the government had no plan to address it  ever. Actually that may be the case, not because Obama, Geithner, Goolsbee et al are stupid or evil but because our democratic system requires a majority to agree. And our campaign finance laws ensure that a majority won't agree - since corporate funds are legally employed convincing the voters to act against their interests.

I despair when I read the comments here that the solution to this problem of excessive right wing influence is to "put pressure" on the democrats by voting for their opponents. Shooting yourself in the foot is not a famously successful strategy.

I agree. There are many points and policies and shades there of, but finally only a binary choice.

We have to recapture the flag of common wisdom, which ends up controlling the debate by setting out the markers for "out of bounds" and "goal line."

Once a person agrees that the "deficit is a problem," the argument is half lost. It becomes the background against which many things appear in the foreground.

This, I believe, was Genghis's point on Dan's blog about walking out on the Democratic Party when he pointed to the process by which the Republicans or conservatives captured the flag.

If one has a plan to address it, then one is acknowledging that it is on some level it is a problem. So the quest is not to get people to acknowledge that deficit isn't a problem, but rather one of many problems which all need to be addressed collectively.  Of course, this means dealing with our challenges as if they are interwoven, complex issues, rather than trying to identify the singular problem and the corresponding singular solution.  We need to be able to have the deficit in the foreground with the other things without it becoming the dominant or singular issue.  The flag we need to recapture is the flag of the reasonable, creative, and deep thinking adults.

What is the precise nature of the defict problem.  Let's think deeply about it.

A lack of tax revenue caused by high unemployment and stagnant wages.

If we were creating balanced budgets in the forseeable future, the current debt wouldn't so much a problem.  But we are already paying interest on the huge debt we have incurreed and with each new budget, increasing that debt.  There is little side issues like the fact that foreigners own nearly 50% of the publically held debt. 

Now how we address it - spending cuts, taxes, etc. is up to debate.  But the fact that the US can't keep growing its debt at the current rate indefinitely is pretty much a no-brainer.  Because of the economy it is generally understood that continued deficit spending needs to occur.  But it is a problem in that it is not sustainable.

When hardcore Democrats reason this way, it really is time to elect a Republican. Because unlike Dems, when they're in power they don't care about deficits. Right now the economy probably needs another three years of trillion dollar deficits to close the output gap, and the Dems seem intent on not doing that.

Anyone who thinks you can fix a recession-induced budget deficit by cutting spending and hiking taxes needs to be locked up in a padded room. And/or thrown to the wolves. And/or not reelected.

So what...you want hardcore Dems to reason that since the Repubs have run up deficits unapologetically in the past, the Dems should now?  I indicated that the current economy is dictating an approach that would continue increasing the debt.  But the approach to support such an action by trying to claim that the deficit isn't a problem is a losing strategy.  It is, however, the easy approach.

Hardcore Dems should be tackling the question of what should we do going forward.  As Flavius was pointing out is that if you're going to run a deficit budget for the next three years, you need to also indicate what is going to be done in the following five years.  Hardcore Dems need a long term plan to offer the public.  Otherwise it comes down to the politicans saying "We'll fix it in the near future, just not right now.  Trust us."  We all know how much trust there is out there in the public on either side of the aisle.

Yes, I think dems should run up deficits unapologetically now.

Yes I think hardcore dems should be tackling the question of what we should do going forward: run up deficits unapologetically!

If they let the Bush tax cuts sunset and deal with the Medicare doc fix, there is no structural deficit (i.e. there is no overall rise in the debt-to-GDP ratio over the business cycle). Check the CBO's estimate of the ten year horizon for deficits under current law: no structural deficit.

My point is twofold - One, that trying austerity, even modest UK-style austerity, with interest rates this low, just makes the deficit problem worse. Don't take my word for it, look at some articles on what is happening with the UK budget: if you try to cut the deficit in a recession overall demand falls, and so production falls, causing revenue to fall, causing the deficit to widen further. It's a vicious cycle. It's really one of the most basic most uncontroversial laws of macroeconomics.

Two, that there is now zero chance that the Obama administration will drop austerity. There is however a chance that a Romney administration will do the right thing and reinitiate stimulus. Of course there are other reasons - war, social issues - to fear a Romney administration.

What makes you think Romney administration would reinstate stimulus package? 

And aside from that little thing about the People giving the House to the Republicans and therefore making it impossible for the Dems to just run up the deficit as they see fit, there is the political fallout for trying to do so. From a political strategist point of view, it is asking for trouble in the coming election.  Now, one can blame Obama & Dems from catering to the meme and thereby making the deficit and federal spending one of the top concerns out there.  But that concern is the political reality right now. 

I am not a fan of austerity measures.  But because of the Republican-controlled House, it has become part of the debate.  Without a long-term plan to deal with the problem, the Dems' only way to make them appear as if they are taking the issue of government spending seriously is by engaging in that debate. 

(also in the future, if you really want someone to check a specific document, it would be nice if you provided the link since obviously you know where it is.)

Here is the CBO document.

http://www.cbo.gov/ftpdocs/120xx/doc12039/SummaryforWeb.pdf

Sorry for assuming that someone with such a 'deep assessment' of the deficit problem would have read the basic documents ... assessing the deficit problem.

;0)

In that document you can see how under current law there is no deficit when the economy is brought back to full capacity. Which is the only measure that matters.

Sorry, but unless you just changed your mind in the last five minutes, you are a fan of austerity measures. That is what buying into the 'deficit problem' meme means. Nobody does it for fun, they do it under the veil of 'necessity'.

As for Obama and the dems' responsibility, I don't think the exculpatory line of 'there is nothing they can or could do' is going to wash in 2012. If he does nothing, and he stands for doing nothing (apart from some 'job training' measures), he will and should lose. If he believes in further stimulus he should stop celebrating budget cuts all the time.

And Romney and the GOP? They love deficit spending when they're in power, and always have. I don't think current talking points are worth much. After all, if we went by what Obama said during the campaign we'd have a very different administration. No one governs as they campaign. Assuming Romney would do any of the stuff he is spouting during the GOP primary is as naive as assuming Obama planned on doing anything he said during the '08 campaign.

I didn't want to make the assumption that what I was thinking of was the same thing you were thinking of.  And see it wasn't that hard to put in the link.  Now we can be on the same page.  Secondly, I have never passed myself off as an expert. Calling for deep thinking on the issue is not the same thing as saying I personally have a deep assessment of the issue. I have said and will continue to say that I have a basic understanding. 

And I am like a lot of folks who see such a summary as at the end of the document and believe that some kind of plan needs to be in place in order to what you say is not a problem:

Beyond the 10-year projection period, further increases in federal debt relative to the nation’s output almost certainly lie ahead if current policies remain in place. The aging of the population and rising costs for health care will push federal spending as a percentage of GDP well
above that in recent decades. Specifically, spending on the government’s major mandatory health care programs— Medicare, Medicaid, the Children’s Health Insurance Program, and health insurance subsidies to be provided through insurance exchanges—along with Social Security
will increase from roughly 10 percent of GDP in 2011 to about 16 percent over the next 25 years. If revenues stay close to their average share of GDP for the past 40 years, that rise in spending will lead to rapidly growing budget deficits and surging federal debt. To prevent debt from becoming unsupportable, policymakers will have to substantially restrain the growth of spending, raise revenues significantly above their historical share of GDP, or pursue some combination of those two approaches.

Now you may have total faith in the politicans that when the witching hour comes to avoid achieving the unsupportable debt, they will rise up and become the statesmen that we hope they all would be.  I don't.  Not right now.  They can't agree on anything and the American public can't agree on what to cut and don't want new taxes.  So if the current stalement continues, then we will eventually reach a bad place.

Which makes it...yes, a problem.  By saying so, doesn't mean I believe in austerity measures.  If the American public is soooo dense that by addressing the long-term problem only leads them to believe it is short-term crisis, then one can also assume they be soooo dense that we will not be able to deal with the need to restrain the growth in spending and raise revenues significantly in the long term. 

And if you want to believe President Romney will veto a spending bill because of austerity measures passed by the Republican controlled Congress after the 2012 elections, go for it.  It's a free country.

On the horizon beyond ten years, it is pretty far down the list of priorities in my opinion. Firstly, because the PPACA does most of the experimentation on cost controls that are available right now (all of the relevant possible future problems lie in the cost of health care). So there isn't much else that can be done at this point other than to see how those experiments pan out, and then develop on them down the road. Secondly, because there is a great deal of uncertainty about the future cost-inflation in health care (the difference between 5% annual increase versus 7% annual increase is huge given compound interest), so we don't know at all if there is a problem and how big it is. Thirdly, right now there is a huge employment crisis. A real, live, actual, factual, blatant employment crisis. That needs to be dealt with. And it should in terms of saliency blot out the fucking sun. The possible, hypothetical, potential future worries about health care costs 20 years down the line shouldn't even be mentioned in the same breath.

At least that is what I believe true, importantly true. And it is what progressives should be arguing loudly.

If you find it more important to rationalize this administration's craven disregard for the present crisis, to the point where they celebrate, celebrate, budget cuts, knock yourself out.

Free country and all...

The point I was originally making was how to approach the discourse politically.  Going around saying simply it is not a problem will mean most of those who you are trying to persuade are going to turn a deaf ear.  Part of this has to do with the fact that some do understand that there is long-term problem, and the current system is so dysfunctionally that there is absolutely no faith it will be able to deal with it.  They look at the behavior now as indicator of how behavior will occur in those years down the road. They are mixed in with those who see it as short-term problem and those who see it as a intermeditate problem.  All of which adds up to a serious messaging challenge.

You can preach to the choir, but I believe currently your choir will remain the same size if the message starts with "the deficit isn't a problem."  That it no way affirms nor denounces Obama's approach to the issue. 

 

If you show people the CBO projection, and explain the uncertainty beyond 10 years and what has already been done to deal with potential problems, that should convince most reasonable people.

Sure.  But in the real world, how many people who aren't already engaged on the issue are going to listen long enough to follow an explanation about the CBO projection?  The situation is made worse because in the end all it is is a projection.  And then you're back to asking them to "trust us, it'll all be okay" while the forces of dysfunction are telling them the opposite.  I'm sure we can send Jay Leno out into the street to find out how many know what the CBO is.  My guess not many.  And if they did, I'm sure not many would trust them any further than they could throw them.  They're just part of the same group that gives us FEMA and the IRS. Why should they care what this arm of the government projects?

In the end, most people are reasonable to the extent you can show them how it will postively or negatively impact them and their personal finances.  Percentages of the GDP...meh!  This is why the comparison to personal debt is so powerful in spite of its error.  The proponents of debt need to find a similiar analogy.  No easy task.  At the same time acknowledging that yes, there is a level of debt that is unsupportable - it is just that we haven't it yet, nor are we that close.

Don't you think that that poll shows just what Americans were told to believe about the importance of the debt?  By the mainstream media, especially Republican politicians, and  President who, the say after Scott Brown's election, told the nation that he was about to appoint a Blue-ribbon deficit commission?  Then appointed to chair it two of the biggest deficit hawks to ever sit in Congress?  And told by their President that the national economy was just like their household budgets??

I don't begin to claim I even understand MMT, and I have tried, but this should help explain that subject anyway.

I agree with Mr. Cho that every person who frames the debt as necessary to consider while so many millions are unemployed, and one in four kids are hungry, and housing values have sunk 35% and offer no security for our futures is essentially acting as part of the problem.  I wish Obama had the balls to hire an entire new economic team.  But he won't, because he still seems to believe that if Wall Street is happy, it's gonna get good for the rest of us.  But there are beginning to be more financial analysts raising alarms that it can all head South again, and there might not be so much diggin' out when it happens.  Attrition almost seems less likely at this point.

 

According to this gallup poll - people are more worried about federal spending and the budget deficit than unemployment, availability and affordability of healthcare, crime, illegal immigration and so on.  Only the economy (as separate from unemployment) ranks higher.  You may disagree with them on this prioritization. I do.  But it is what it is.  So as I have said over and over again here, if you want these people, the People, the one's who seem to not listen to corporate media on issues like Afgahanistan and bank bailout, to listen then maybe the first step is to respect their concerns, their worries, their fears even though we disagree with them.  Only then will one be able to have listen close enough that they can be persuaded that maybe, just maybe this or that particular concern, worry or fear may not be valid.

Yup, saw your poll; didn't dig into the exact questions and additional info.  But this poll shows that the only fix seven in ten are interested in is taxing those making over $250,000.

"And it appears many Americans still feel that way. Nearly two-thirds of those surveyed recently by Gallup said they worry a great deal about federal spending and the budget deficit.

Despite those concerns, the public has little appetite for most of the remedies proposed Republicans and Democrats, according to a Washington Post-ABC News poll released this week.

The survey found strong opposition to cutting Medicare (78 percent), Medicaid (69 percent) and military spending (56 percent).

The only proposal that seemed to garner much support was President Obama's call to raise taxes on households earning more than $250,000 a year. More than seven in 10 backed that idea.

The conflicting poll numbers underline the difficulty confronting leaders from both parties as they attempt to sell their long-term budget visions to the country.

I personally do talk to people about the debt, and beyond that, and writing online, how would you imagine i, any of us, respect them?  And I can't make sense of your sentences about 'the ones who don't listen to the media on...etc."

You may be muddled about it, IMO, as Peter is, since your comments seem to have been evolving here; I credit Mr. Cho's patience; it's not that these issues haven't been aired many, many times here.

i put the "not" where is should not be.  it goes back to the idea that when people tend have opinions that are against one's agenda it is the corporate media or liberal media's fault (depending on which side of the aisle one is on).  Now if they believe the deficit is bad because the corporate media has brainwashed them, then one can say that it is because of the corporate media that they don't want their medicare cut, or want out of Afghanistan. 

And it's evolving to some degree because I started with making a marketing point, but of course then folks like Mr. Cho will then make assertions that I believe this or that because I think the marketing campaign should be framed this or that way.  Sometimes I just want to stand back and be "academic" about a subject.  And there are others who believe every post has to be some personal testament as to where one stands on an issue.  So in one sentence I find myself talking about where I stand, and in another sentence I am talking about what someone who wants to get elected should stand.  Two different places.  Sorry for the confusion.  

Thanks for clearing it up a bit.  I think you will like this thedemocraticstrategist page; the authors agree with you on the persuadable middle voters and that they are 'open-minded', which examples made me laugh.  They are trying to be serious, and have a pdf strategy from their group linked.

Without spending any time on where I agree and disagree, they do seem to take it for granted that Dems leaders want government to help create jobs, and some days that seems debatable.  I go back to the idea that if eight years of Bush didn't cure us of trickle-down economics being viable for anyone but those at the top, and the Dems failing to explain why they won't work again now, what use are they?

Are they 'being respectful' or weak; or do they maybe actually suppport supply-side economics?  I really don't know any more.

Thanks for the link.  It would make for a good platform for discussion on the impending election.  Plenty of stuff to argue about - much of which pops up in these threads. Maybe if I get the time I will blog this.

As far as the Dems - the problems is that there are the Senator Nelsons who basically Republicans with a D, there is the Sanders, and all the ones somewhere in between.  Trying to get a cohesive message from this bunch is impossible.  I would say that if you're going to win elections in my neck of the woods, you have to pay lip service at the very least to supply side economics or you won't be elected.

This is true and important.

There are the facts, the policies, and there is the political strategy.

We always have debt and always have, and we're always paying interest on our debt.  Exactly how big an issue is the current debt service?  Japan's debt, for example, is more than twice our debt.

The usual way debt service goes down as a % of GDP and a % of revenues after a recession is that the economy grows.  GDP increases and tax revenues increase, and debt payment takes care of itself.   Maybe we should just focus on growing our economy and forget about slashing spending or raising taxes for now?  The latter two will just put a further drag on growth.

Our budget never has to be balanced, by the way - not ever.

The only thing that matters is our ability to refinance the debt as it comes due.  There haven't even been hints of problems on that front.

Why is it so hard for so many middle-of-the-road Democrats to recognize that debt hysteria is primarily a routine Republican tactic for attacking and dismantling the institutions of progressive government?

Because so many Democrats in Congress and the White House are embracing the notion.  The New Bipartisanship.

And notice when they suddenly found religion? Right after they passed the tax cuts for the rich last december.

So first tax cuts for the rich worth 70 bn, for stimulus. Then, wow, dammit, we need to cut social programs worth ... 70 bn. Who needs republicans with Dems like these...

And froze, as per our President, federal pay.  Brilliant move, IMO; that is, is you want to play into Republican fears squared, trined.  Or something.  Glad to know you a bit, Mr. Cho.  I do not know how you remain your equanimity in these discsussions, leading people to see what they have missed over the past two years.  Like how many seem to believe that the financial regs the White House 'allowed' we in fact 'the most significant regs since the Great Depression' (the lie masquerading as the truth). 

From what I see in the ME, neoliberal economics brought to those nations by the IMF, the next step is privitization of public entities.  Will we go there next in your opinion, Mr. Cho?  (Excepting the Obama/Duncan charter schools private/public partnerships, of course, which are already in place.)

We are sooo screwed when Dems are buying this stuff. 

Not sure what you have in mind. I don't think public/private is much of a distinction any more. As corporatism spreads, public entities are effectively governed by private interests. In Europe, the central banks have taken on all, all the bad loans in the hands of private banks. And when that paper ultimately turns out to be worthless, the tax payer will have to pony up. The only reason to do that is to make the working class pay for the mistakes of the corporate class. So nobody wants to privatize central banks. They exist to transfer private losses to the public. And private interests are quite happy with that setup. Beyond that one example I don't know quite how the distinction applies nor how it is evolving...

I was loosely speaking of 'selling public infrastructure  to private concerns'; it ws happening in so many ME nations as Things Fell Apart in their economies.  Here, it googled the phrase, and found this:  

http://www.bing.com/search?q=selling+public+infrastructure++to+private+c...

Plenty.  The notion that Private is more efficient, but has no government oversight, plus brings some cash in, as in: Wisconsin's plans.

Sure. There's all the privatization in Greece right now - imposed by the IMF and EU. But some of that will probably be a good thing - they're basically very corrupt and inefficient utilities and such. Some privatizations are catastrophes, like British Rail under Blair. Others are hugely successful - like airlines and phone companies. Public-private partnerships are often very efficient in infrastructure, like how the EIB increases its impact tenfold by letting private banks piggyback on its investments. I don't think there is a reasonable across-the-board judgment to be had.

More positive take than I would have considered; I'm used to so many things like prisons and other concerns being privatized in the name of savings, then horrid things happening with no oversight.

Yeah, utilities: I can't see here that privatizing what is intended for the common weal and selling it to for-profit concerns can work well to customers' advantage.  It's not like they can choose to go to another power company, water company, etc.

Well, I'd look at things on a case by case basis. Private prisons don't seem like a good idea. Private utilities seem to work just fine in a lot of places. Depends on the regulators and such. But, no, I don't have any deeply enlightened thoughts on the subject...

Googled WI and OH and privatization of infrastructure, and found this at Howie Klein's place with a few of the things their Govs want to sell off, and a link to 'In the Public Interest.org ' discusiing some of the pitfalls (and I don't mean you have to read it, or be interested; I put it up in case others may want to read).  Seriously: it's not homework, Mr. Cho.

Howie's page has video of Bernie Sanders' floor speech on his bill for balancing the budget; it's nice.  ;o)

Yes, but you see, we've run deficits for decades. I remember clearly all through the 60s and 70s, Republicans would constantly talk about the problem and unsustainability of spending more than we were bringing in.

It was a problem without a lot of political traction. We were ALWAYS running a deficit, and people were ALWAYS saying bad things were a-coming as a result...but they never arrived.

But now we have a deficit figure that truly scares people. 14 trillion dollars. And it scares people because the "common sense" argument is being made that it is threatening our ability to do anything else. If your debt service overwhelms the budget, you have no money to deal with the other problems you mention.

So I should have been clearer: Part and parcel of capturing this flag is the notion that unless this problem is addressed head on and immediately, NO OTHER problem is solvable.

I have many liberal friends who worry about the deficit, which is a sign the flag has been captured. It's not that they don't want government to spend; it's that they think government can't, or soon won't have the money, to spend.

So the discussion shifts from values and one's view of government's proper role to a factual (or factual-sounding) question: Do we have enough money?

And they make the easy-to-hand, "common sense" analogy between this question and their personal finances. If there's no money for X, there's no money for X, even if X (medicine, food) is very, very important.

Seems to me Krugman and others offer a good start. And so does MMT, which SEEMS to think the deficit isn't a problem at all.

The part you're missing in this is that we are currently adding to that deficit.  And more importantly, given the political landscape, it doesn't appear that Congress is capable of ever figuring out how to generate a balanced budget.  So if even one is okay with a 14 trillion dollar deficit, there is a point when it will become a problem.  $18 trillion? $22 trillion?  $30 trillion?  No matter what the figure, the current state of politics indicates we're on our way to that figure.

So it isn't that the current deficit is a problem (ie a problem that requires immediate action*), but that we have the current deficit with a government that is incapable of keeping from making it grow larger and larger and larger until it is a huge problem.  For many now I believe the $14 trillion has become a symbol of problem with the budgetary process that has evolved over the decades.  And when people see things like what happened in Greece, it becomes difficult to convince them that this process is something that can be ignored in the long-term.

*It would be nice if we were able to differentiate between various kinds of problems, so that I can call something a problem without implying that it requires immediate action.  A problem that needs to be eventually addressed is still a problem.

The deficit will go down all by itself as economic activity comes back, unemployment goes down and incomes rebound.   More income; more revenues from income tax.

But isn't the question what IS the figure?

Is there a limit? Does the concept of "limit" make sense here?

I think we've been "adding" to the figure for some time.

You know how conservatives do that neat trick where they say: Even if you confiscated the entire wealth of the nation, it wouldn't be enough to pay off the debt.

Well, logically I think, the same applies to cutting spending. We can't cut enough to bring the budget into balance assuming, even, this is an important goal.

(Part of the reason why is, as someone pointed out above or elsewhere, when you cut spending, you also cut revenues, maybe even more. So, the more you cut, the higher the debt mounts.)

I'm not entirely sure Greece is analogous to what we have though, I agree, it does scare people.

It's worth reading the MMT economists on this for a different perspective.

I don't know if they're right, but they really broadened my thinking.

Ultimately, the mistake is in making the analogy between your personal finances and the government's. It's not just a question of size differences. They are two different things.

It's incidious because the analogy is so easy to hand and seems to make sense. When we run out of money, we run out of money. Period. The government doesn't run out of money.

MMT also turns other bits of common wisdom on their heads. For example, surpluses are actually bad things and mean that there's that much less money working in the economy. Deficits, OTOH, are a sign there is that much more money working in the economy.

This is the opposite to what conservatives say when they say that deficits suck money out of the productive economy and are a drag on it.

Dan Kervick can point you to the relevant sites on MMT; I learned about this from him.

I think those are quite valid assertions and need to be included into how we discuss the deficit and debt and the current budget.  I think at the core of what I'm saying is that if you start off your discussion by saying that the national debt and government spending in its totality as it is now isn't a problem, most people will tune out whatever is said afterwards.  In other words, it's a problem but not a problem of the nature they are thinking of it as. (I would add that deficits as manifested in a debt to foreign entities do suck money out of the economy by taking a tax dollar which could have been used on consumer spending and using it to pay the interest on that debt).

The reason the Chinese invest a boatload of dollars in US treasuries is because they happen to own a boatload of dollars, and want to invest them in something safe.   The reason the Chinese have a boatload of dollars is because we have used dollars to buy tons of extremely useful and cheap stuff from the Chinese.   We pay relatively low rates of interest on the bonds the Chinese buy.  Unless the idea is to stop buying stuff from other countries, other countries are always going to use their dollar reserves to buy Treasuries.  What else are they going to do with them?  Stick them under a mattress?

We manufacture the world's reserve currency don't live in a gold era anymore.  When we buy stuff with our money we don't dangerously deplete our stocks of bullion.

To his credit, I will give Obama an A+ for keeping the US economy from going over the abyss.

Unfortunately, the rest of his efforts warrants a big, fat  F .

The health care legislation is way too weak and open to attacks by the GOPer's to make it even more useless. The Swiss Cheese texture of it makes it easy to find holes in the fabric of the legislation that can be manipulated for political reasons at the expense of patients and the public.

His insistence upon bipartisanship at all costs no matter what must be surrendered will be the death knell to all the social services the public has come to expect and appreciate from their government. For instance, he has a choice to make ... either accept the Ryan Plan or be forced to concede ground and give in to Medicare and Social Security cuts to get GOPer's to raise the debt ceiling.

And above it all, he spent too much time shoring up the economy without giving employment a second thought because he knew the GOPer's weren't going in that direction if he wanted their support.

In 2012, Obama is going to have to run against not only a weak GOPer Presidential hopeful, but himself as well ... his past track record will be the third candidate.

This is astute.

Seconded.

The health care legislation is way too weak and open to attacks by the GOPer's to make it even more useless. The Swiss Cheese texture of it makes it easy to find holes in the fabric of the legislation that can be manipulated for political reasons at the expense of patients and the public.

Watching the progress of the bill it appeared to me that not only was there no majority for a better bill but that there wasn't even  a majority for that one. The question I ask is whether this bill will result in some people not suffering who otherwise would have. And some people not dying who otherwise would have. I answer both those questions yes. And then ask whether I think a better bill could have been passed. I answer that no. So I salute Obama for a momentous achievement rather than criticizing him for not achieving something that could not be achieved.

I basically agree with you. It is an improvement and that is improvement and important. All progressives worthy of the name should be in favor of 30 million some-odd uninsured people having insurance. Whether that actually is achieved is something we'll have to see about.

However, I wonder whether a better bill couldn't have been gotten. I have no proof of this, really, but here's what I'm thinking...

Obama came in with this overriding notion of bipartisanship. He saw what many had remarked upon, which was that our politics was stuck in the mud because "half" the people said X and the other half insisted on Y. Neither side could move forward because of the other side. Both sides were trying to walk forward with only one leg.

REGULAR people who are Ds and Rs want basically the same things. If he could get beyond the ideological divide, he could bring people together.

So he's tried to overcome this gridlock and ideological divide to almost no avail, as far as I can see. He assumed good will from Rs when there was none.

But what he needed to do, quickly and decisively and early on, was reset the terms of the debates, not with a bipartisan consensus, a little from this side, a little from that side, but with bold strokes that reset the debate, and then galvanize the public around those bold strokes. So...

Medicare For All...

It's been dismissed as too radical and too left, but it has many important advantages:

• Everyone knows what Medicare is.

• Everyone likes Medicare and probably knows someone on it.

• Medicare For All could have been positioned and been, in fact, a way to truly reform the existing Medicare system through cost controls and by adding millions of healthy people to its rolls. The Ryan attack would have been utterly pre-empted.

• It would not have required anyone to buy anything (do anything) directly.

So, in one fell stroke, he would have covered everyone, sick and poor, healthy and wealthy. He would have solved the one serious deficit problem we have. And he would have had a proposal with some built in political teflon inasmuch as attacking Medicare is like attacking America.

One of the things I've sensed in various conversations with people who disagree with me is that even folks who didn't vote for Obama were hoping for serious change. Even if they thought this proposal was too far left, they'd have to agree that it WAS some serious change.

And again, it would have been hard to attack, because even conservatives are on Medicare, and so are their parents and their grandparents. They aren't about to call those people socialists.

Instead, he chose a compromise. I don't fault him for it. The logic was there: If I go halfway, others will meet me halfway. Especially if I take up an idea that's at least 75% Republican in origin. But a compromise, which almost always has a lot of hard-to-understand moving parts, is easily attacked. No one knows what it is, so it's easy to become fearful of it. And if I move five steps toward them, they think there might be another two steps in it for them if they really press.

Medicare For All could have been a five-page bill...Smile

Plus it would have totally reset the terms of the debate. He could even have pitched as a way to save Medicare rather than as a revamping of the American health care system.

By the time the opposition had woken up and figured out how to demagogue it, the bill could have been a done deal.

Plus...plus...plus...

He could have stolen Jason's name for the system: AmeriCare and dropped the medicinal and slightly geriatric sounding Medicare name altogether.

Right now, the bill as this no-name name. The ONLY name that's stuck is the derisive ObamaCare.

But AmeriCare--caring for all of America's health care needs--would have stuck like crazy. Would have totally pre-empted all the demagogic names.

Who could be against caring for all of America...all Americans?

Who could be against truly saving and improving one of the most popular and functional programs in the country?

Who could be against doing all that AND solving the biggest deficit problem we have?

Who could be against truly saving and improving one of the most popular and functional programs in the country?

 

I'm going to be a bleeding heart and ask instead:  Who could be against saving human beings from suffering?.

Dear old David Brooks once again quoted the figure that we're contributing $140K per person to medicare and getting back $500K worth of services.  OBTW  we are getting the service.He get's one implication,only, that the tax payers are paying $360K /person for each of the aged to prevent them from suffering and an early death. He doesn't gets the other implication that if we tax payers stop paying that many of those aged americans will not have that $360K so, guess what, they'll suffer and die.

It's possible, that he does get that and , being a nice man as I think he is,  dodges it by convincing himself that competition will reduce the  $360K. so the number who suffer and die prematurely will be less. If he does think that he is ,  let me put it this way, he's not using his faculties to the greatest extent.

I love dumping on Brooks as much as the next guy. But the centerpiece insurance exchanges in PPACA pretty much support Brooks' thinking. If you expect the insurance exchanges to produce innovation-based cost controls, then turning Medicare into a similar private insurance exchange program should be just as promising. If you don't think turning Medicare into subsidized private insurance exchanges will turn out well, then you can't support PPACA's insurance exchanges. So there isn't a coherent position which says Yay for Obamacare and Boo for Ryancare. They're structurally the same thing. People support the one and oppose the other purely based on partisanship.

Of course, that leaves aside the awesome hope in PPACA of expanding Medicaid.

It's seems to me that Obamacare sees the exchanges as an element in a goal of achieving for all americans the same assurance of health care that essentially all Europeans have. And that Ryancare sees them as an element in achieving whatever  reduction is possible in the number of americans who needlessly suffer and die  while  eliminating the deficit 

Right. But lets keep two things separate here. One is that alot of Obamacare supporters are fans of expanding care, period. They don't have any particular affection for subsidized private insurance exchanges, and would have preferred some public plan. And conversely alot of Ryancare supporters are heartless jerks who just want spending cuts the consequences be damned.

But another thing is the actual merits of the two plans. They are very similar in structure. Ryancare is Obamacare for the elderly. Most people agree on this. And it makes Ryan a hypocrite for attacking Obamacare, and arguably makes some Dem supporters of Obamacare hypocrites for attacking Ryancare. But you have a lot of wonks on both sides who genuinely believe in the market-based profit-oriented approach common to both, and have high hopes of cost controls coming out of it. And many people on the Dem side argued for the insurance exchanges on the basis of those virtues. I don't remember hearing many people saying "these exchanges are horrible but they're a concession to the GOP so we have to include them".

I quite seriously think a decent compromise would be to pass Ryancare with slightly higher subsidies (inflation plus 2%), and let Medicare compete with private plans as a public option. And - here's the progressive move - also let Medicare compete as a public option for the whole population, not just the elderly.

That way, we let the two progressive and conservative philosophies of efficiency compete, literally, in the market of ideas: if progressives are right private plans won't be able to compete and will disappear leaving us with single-payer. If conservatives are right, medicare will lag in terms of efficiency and eventually leave the field to private insurers.

Or we'll end up with FEDEX and the Post Office.

I'm not so sure about that.

Medicare serves a population whose health care may simply not be "affordable," in the usual sense of that word.

IOW, the reason we have guaranteed care for people over X is because no insurance company will compete for that business in ways commensurate with the cost of needed services.

Also, the need for care may be somewhat the inverse of a person's ability to pay for it. IOW, poorer people tend to have worse health problems than wealthier people. And yet, they can't pay for the "cadillac" coverage their health condition demands.

This situation doesn't hold for the general population whose health and age varies.

I don't see what you're disagreeing with in what I said...?

The high average cost of medical care for the elderly is what justifies government help in paying for it. Democrats want more help on the whole than Republicans. But that leaves aside the question of how to provide that help - a subsidy or a government service. And there the main issue is which is the most efficient way of doing so - which is cheapest and which gets the best care. That question is largely a scientific, empirical matter.

As for the Fedex, USPS model, that sounds right. Like in France.

There are lots of ways to San Jose.

While I certainly respect your thoughts there's a smallarmy of thoughtful people of the sort  from whom we heard during Hillarycare and again during Obamacare. who have spent a major part of their lives on this subject and don't happen to be participating here tonight (.And if they were they might agree with you or intelligently disagree.)

But.

what the legislation that emerged , barely ,  should probably have been called Stupakcare because its final 24 hours were consumed altering the work of 540 other legislators to get the support of Bart Stupak, his catholic constituents and his catholic conscience.. And that is not a disparaging remark it's  short hand for saying that the task Obama faced was not designing the ideal plan it was designing a plan that would not be opposed by 218 congressmen.. But would still provide sufficient benefits so that 6 years from now 52% of the voters will want to build on it.

By that criterion  Obama should be admired for getting us to Stupakcare rather than pilloried for not having achieved  the legislative  eqivalent of reversing Niagara's flow,

 .

 

Once again not sure what this has to do with what I said.

But just to respond - yes there are many smart people who may or may not agree with what I say. And yes, legislation is hard to pass. And sure, I'll take your word for the manifold ways of getting to San Jose.

As for pillorying Obama, that's not at all what I'm doing here. I was remarking on the similarity in structure between Obamacare and Ryancare, a similarity that makes Ryan a hypocrite for attacking Obamacare. By the same token I think that progressives have to come to terms with the fact that their own biases prevent them from recognizing those similarities and thus from taking Ryancare seriously. In short, it has problems, mainly in the low subsidy levels and the absence of a public option. But if you fix those problems - upping subsidies and including a Medicare option in both Ryancare and Obamacare's insurance exchanges - then you have a great bi-partisan compromise available.

There are similarities between RyanCare and ObamaCare, but the differences are important, too.

• RyanCare states that competition is the mechanism for bringing down costs for the elderly. The voucher is intentionally kept lower than the costs of insurance to "goad" prices downward and also to lower government outlays.

• If the vouchers aren't going to be less than what government is paying now, RyanCare doesn't save money. At the same time, if competition isn't going to bring prices down, then the elderly won't be able to afford insurance or will suffer from worse care.

• Opponents of RyanCare would argue that competition won't bring down costs for the elderly because elder care is inherently unprofitable. And the people who need the most care and would have to buy the richest policies to replace Medicare often can't afford it.

• In short, the facts that normally make competition work don't seem to be present when it comes to health care for the elderly. The folks who need the "Cadillac" can't afford it. And the folks selling the "Cadillac" are unlikely to sell it at a price the elderly can afford.

• I guess we could devise an experiment to test the relative efficiency of RyanCare and ObamaCare, but I find it hard at this moment to see how one could control for all the relevant factors. And it's a little hard to see how RyanCare, which inserts a profit-seeking middleman into the equation, could win this contest.

• ObamaCare is different because it means to serve a wide range of humanity with widely varying needs and resources. Totally different case, IMO.

• Also, if I'm not mistaken, the exchanges are meant to be highly regulated sandboxes in which insurance companies will compete. Companies who don't play be those rules don't get access to the customers in the exchange.

• RyanCare, AFAIK, doesn't envision any such sandbox or rules. The senior is simply out in the wider market place with his voucher in hand looking for whatever policy he can find.

 

@Another Trope (your stuff in italics)

Sure.  But in the real world, how many people who aren't already engaged on the issue are going to listen long enough to follow an explanation about the CBO projection?  The situation is made worse because in the end all it is is a projection. 

Well I think everyone understands that the debt problem is about where it is trending. Ryan's presentation has those beautiful graphs with exponential increases out in the future. So I don't think talking about 'projections' is going to confuse anyone. And then when they say "everyone has their own projection, so why should I listen to you?", that is where you introduce the non-partisan CBO. That is why they should care about its projections. Of course those people who distrust absolutely everyone and just believe as a matter of faith that the debt problem is untractable, those people you can't help anyway.

Percentages of the GDP...meh! 

It's the important figure. And it's easy enough to convince people of that. As a household, you take out only a mortgage you can afford to finance on your income. If you're richer you can afford a bigger house and a bigger mortgage. Donald Trump has a lot more debt than you or I because he can afford to finance alot more debt. So you need to look at relative figures, relative to what you can afford as a part of your income. As a student you take out a student loan you can afford to pay off. Again, each time its about what future income you project to have. Your student loan, your car loan, your small business credit card financing, all those things you take on depending on your future projections of income. If you're paying for a degree from Harvard Law, or Johns Hopkins medical school, nobody is going to think 200'000 is an unmanageable debt load. GDP is 'income' on the national scale. So that is how it is okay that the federal debt is much bigger now than fifty years ago - because the country is much richer. And that massive spending on education and health care? That's investment for the future.

This is why the comparison to personal debt is so powerful in spite of its error. 

I don't see it as an error. Of course like all analogies it has its limitations - that is why it's an analogy - but it is easy to use in a constructive manner to convey the urgency and usefulness of government action right now.

(i) When your household goes through a temporary period of financial difficulty, what do you do? You don't kill off grandma and throw the kids out in the street. You work harder to make more money. You invest in new job skills, new tools to make more money. If you have equity in your house, that is precisely when you take out another loan to get you through the hard times. Hard times is what you earn and save FOR, it is not the time when you start saving.

(ii) When you're out of a job it's a good time to do all the stuff around the house that you don't otherwise have time to do - your time is cheap. Similarly, when there is an output gap, that is when it is cheapest for the government to finance much needed infrastructure investments. 

(iii) Social safety net spending likewise. The safety net is there precisely for times like these. It is absurd to cut safety net spending in such a downturn, much like the cookie jar of emergency cash is not something you start FILLING ... in an emergency. If you have an emergency, that is when you use it.

dunno, there are lots of different kinds of partial analogies that can be made without getting hung up on technicalities or supposedly scary words like 'projection'. 

You don't kill off grandma?

 

{shiiiiiiit.}

Well I think everyone understands that the debt problem is about where it is trending.

No, not everyone understands that. IMO.  To most debt is debt.  (and if everyone understood this, it would mean terms like "projection" wouldn't be scary)

And all the other side does is say - "well, the US is some household has gone through rough times and overspent even in the good times, and now they're taking out their fifth or sixth loan on their house with little prospect of finding new revenue to even deal with the first loan. And they talking about spending even more money than the previous year and take out more loans on their house."  And if you counter with CBO ("the CBwhat?) and GDP (how many Americans know what this stands for and of those how many can give a reasonably accurate description of what it means) and percentages and student loans and Donald Trump and what the debt was 50 years ago and all you'll get is at best confusion.

People want things simplified. But the issue (problem) isn't simple.  And when one simplifies with an analogy, it allows the other side to twist it, because it is an analogy with all its limitations, in order to fit their agenda.

Basically you think it is a relatively easy task to get the American people up to speed on the debt, deficits and government spending.  I don't, for a host of reasons.  We'll go around and around and around without seeing eye to eye on how to approach this, so there is really no point in continuing this.  Keeping in we basically agree on what the government should do in regards to spending and deficits in the current economic environment.

Yup.  But don't worry there will be a big fight over tax cuts for the wealthy right before 2012 where he will make a principled stand and say he was wrong to extend them. Also Goolsbee's an idiot, but let's hope his devauling the dollar for exports works, but I am not hopeful since the rest of the world is a disaster too. 

I'm sure most of us here will be voting for him (not I should say happily, but what are you going to do). Political Scientests all rely on recent history for their models (the HW comparison you make). But  the models work until they don't.  Roosevelt was relected in pretty bad times.  Sad, we know so much more these days.  

 

Very nice blog and comments.  I come out feel strongly both ways.

Latest Comments