The Bishop and the Butterfly: Murder, Politics, and the End of the Jazz Age
    Michael Maiello's picture

    Mathematical Proof That Thomas Friedman Is An Idiot

    By Michael Maiello on Sun, 04/21/2013 - 10:36am | Politics

    This morning, Thomas Friedman writes that it is unfair for lefties to criticize Obama's Chained CPI Proposal.  In his words:

    "It was good to see President Obama put out a budget proposal that addressed all three needs. The attacks on him from the left are unfair because, ultimately, we will need to do all three even more. As Bloomberg News reported on Monday: 'Typical wage-earners retiring in 2010 will receive at least $3 for every $1 they contributed to the Medicare health-insurance program, according to an Urban Institute study.'"

    Oh my!  A three to one return!  Unsustainable!

    Except that the Bureauu of Labor Statistics has a handy inflation calculator that can help us make sense of this.  A retiree in 2010 who entered the workforce at 22, right after college, would have started paying taxes in 1967 when $1 had the same purchasing power as $6.53 today.  In that context, a 3:1 payout is an absolutely awful return.

    And, of course, health care cost inflation outpaces plain old vanilla inflation.  So, it's even worse.

    That doesn't make Medicare a bad program.  It guarantees access to health care for people who need it most.  That has unquantifiable benefits.  But, nom in real terms the average person is not taking a benefit worth three times what they paid and, even if they were, a 3x return over 40 plus years is by any standard I've ever seen, a conservative expectation for an investment return in a generally growing economy.

    Topics: 
    Politics

    Comments

    I have no idea why he alleges these things.

    Obviously he writes for money, just like all the others.

    But today he is proposing a carbon tax?

    http://www.nytimes.com/2013/04/21/opinion/sunday/friedman-how-to-put-america-back-together-again.html?ref=opinion

    I never really liked the guy's politics; but I at least can understand why he wanted war in Iraq--he sees foreign relations as having one main goal and that is the protection of Israel.

    But this crap?

    I really do not understand why he comes to these conclusions domestically. 


    by Richard Day on Sun, 04/21/2013 - 12:31pm

    It's all part of his "serious" pose.  Really, I blame the stupid think tank that made the false claim about Medicare's inflation adjusted rate of return in the first place.  It gives ammo to people like Friedman who think that asking people to make due with less is always the adult thing to do.


    by Michael Maiello on Sun, 04/21/2013 - 12:44pm

    A carbon tax is the only way we can save our mother.


    by HSG on Wed, 04/24/2013 - 11:56am

    Friedman hires a guy to do the math, Friedman 'interprets' it. Does he plan a column on the SS/Medicare returns for people who die before collecting a penny of benefits?

    Are they gaming the system or did the system game them?  Or is that the way insurance works, some get more than they paid in, some less, some none? 

    If privatized, we are all on our own, and the only sure outcome is Wall Street will skim hundreds of billions in fees, if they don't crash the program entirely within a decade.


    by NCD on Sun, 04/21/2013 - 2:38pm