Morning/Afternoon Papers/Radio

November 29th, 2012 at 11:20 pm

Just a few notes from the broadsheets (sorry, you young whippersnappers, but I still like to read the actual paper) to bring to your attention.

Much of this sounded about right to me, as per where cliff negotiations are headed, and while it may sound optimistic to some readers, I still think the odds are that we have to go over the cliff to get to this endgame.  I hope I’m wrong, but as you’ll see if you give this a close read, there’s a lot of moving parts and each one is attached to sensitive politics.  Still, if we go over briefly, that’s not recessionary (which isn’t at all to say it’s desirable).

Next, I welcome help from any and all in resolving this ridiculous fiscal trap we’ve set for ourselves, but some of the positions of this “Fix the Debt” group, as described here in the WaPo sound more like their group should be called You Fix the Debt—We Want a Tax Cut.

Nice pop on revised GDP in the third quarter–was 2%, is now 2.7%.  But “…the revision was driven by increased inventory accumulation and a jump in federal spending — factors unlikely to be repeated in the current fourth quarter.”

Finally, in an earlier post, I recommended this NPR story on the hidden costs of raising the eligibility age for Medicare from 65 to 67.  But a commenter, who also liked the piece, points out that Julie Rovner, the NPR reporter, called the age-increase proposal “popular.”  It’s not popular at all, as this poll result shows.  Sure, there are policy makers who like it.  But that doesn’t make it popular.  That’s a classic beltway mistake—a few big shot politicians get jazzed up on something, and all the sudden it’s popular, despite the fact that a) it’s not, and b) at least in this case, it shouldn’t be.

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7 comments in reply to "Morning/Afternoon Papers/Radio"

  1. Gerald Gherardini says:

    Democrats should vote to raise the Medicare age to 67 ONLY if Obamacare was amended to include a public option, or allowing anyone over the age of 55 to buy into Medicare.

    GLG


  2. Th says:

    “You Fix the Debt—We Want a Tax Cut.” Brilliant


  3. PeonInChief says:

    It’s worse than you think. It wouldn’t just require that people work to 67. Let’s say that you have a worker providing family health insurance. She is, let’s say, 60. Her husband is 52, which makes it unlikely that he can qualify for an individual private plan–except maybe at an exorbitant price. That means that the worker has to continue working not to 67, but until her spouse is eligible at 67. She’ll be working until she is 75, when her husband will be eligible for Medicare. And it’s more likely that lower-income families will be caught in this one, as low-wage jobs are much less likely to come with health benefits.


  4. Allan Richardson says:

    All of these discussions about health care ignore the primary reason for doing it right: IT’S MORALLY REQUIRED. All the experts agree that the total public and private expenditures for health care, as a percentage of GDP, would be LOWER if everyone had access to preventive and maintenance medical care as well as emergency care. The proof is in countries less prosperous (in terms of aggregate GDP) than the U.S. which spend a lower proportion of THEIR GDP on health care but have BETTER results (notwithstanding the right wing urban legends about someone who knows someone who couldn’t get an operation soon enough in Canada and came here to have it done) in terms of lifespan, general health, and infant mortality.

    But, assuming most of us are Judeo-Christian in our moral attitudes, even if not in our theology, we ought to recognize that, just as we spend hundreds of thousands of dollars to rescue avalanche victims or lost mountain climbers, EVEN IF IT COSTS MORE (which it would not), IT IS A MORAL OBLIGATION of a civilized, as opposed to a barbaric, society.

    Yet the loudest Christians are the ones opposed to health care reform! As you did it to one of the least of these … you know the rest.


  5. MaryinChicago says:

    Raising the eligibility age is a TERRIBLE idea, not simply because doing so will raise costs both within Medicare and within the exchanges and employer-sponsored plans, but because longevity is a class-mediated phenomenon.

    Investment bankers and private equity gurus may be living to age 90 or 95, and lower-level white collar workers may be living to age 85, but there aren’t a whole lot of construction workers or waitresses or cab drivers or retail clerks living beyond age 80. Life expectancy at age 65 has indeed increased for the top 20 or 40% of the income distribution, but it’s hardly increased at all for the bottom half of the distribution. Rich people are living longer; the poor and working and middle classes, not so much.

    In addition, lots of investment bankers and lawyers and other members of the 1% are delighted to continue working well into their 80s or 90s, because they enjoy their jobs (and their jobs’ perks) and because their jobs don’t take a particularly heavy toll on their bodies. On the other hand, those construction workers and retail clerks who’ve been paying Social Security and Medicare taxes since they were 16 often are too sick, by the time they reach age 65, to work for another two or five or ten years.


  6. readerOfTeaLeaves says:

    Going over the cliff is less worrying than allowing the status quo to continue.

    As this graph clearly shows:
    http://jaredbernsteinblog.com/wp-content/uploads/2011/12/cb7.png
    the deficit originated around 2001 and was the direct result of reckless, irresponsible policies, specifically: wars on the federal credit card, profligate tax cuts in 2001 and 2003, in addition to rampant financial deregulation (and its downstream effects like TARP).

    Social Security does *not* show up as a source of national debt on that chart.

    Medicare and Medicaid are also *not* shown to drive public debt on that chart.

    A short history of how we got into this mess is nicely explained by McClatchy today in a very thoughtful article:
    http://www.mcclatchydc.com/2012/11/29/175922/fiscal-cliff-crisis-made-in-the.html

    It points out that this ‘cliff’ is the result of years of deliberate, strongly partisan, policies. Social Security did not create the problem: tax cuts, two unpaid for wars, and deregulation did.

    So now, the GOP’s political chickens are finally coming home to roost, as chickens tend to do.

    But evidently, it is impolitic in D.C. to shrug and say something sensible like, ‘This is about chickens coming home to roost, and actually it is years overdue. Maybe now, we can finally get some balance back. At long last.’

    Apparently, that would embarrass the people who let the chickens run wild and get out of hand. So to offer them fig leaves of respectability, there is a big drama and dark talk about a ‘fiscal cliff’ and a ‘recession’. And then, for more bamboozlement, there are Very Alarmed Reports about Social Security and Medicare – from the very same people who put wars on the credit card, voted for absurd tax cuts, deregulated Big Finance, and let the federal deficit skyrocket. The last thing they want is a clear account of their own culpability — so instead, they bamboozle by moaning on about Medicare.

    This is becoming farcical.

    All the Democrats have to do is keep things simple, and hold up that wonderful CBPP graph and say, “we will only deal with factors that this graph clearly illustrates led to the federal deficit. Because this is based on facts and accurate data. Bringing in other factors muddies the waters.”
    End of discussion.

    Dr. Bernstein, you repeatedly express worry about a ‘fiscal cliff’.
    But as someone who sees this as a choice between being held ‘political hostage’ by the same group of people who put wars on a credit card, or taking the risk of a ‘fiscal cliff’ and a recession, I’ll take the cliff. Every. Single. Time.

    Maybe I’m around too many entrepreneurial people, but I believe that economies can recover. However, the debasement of political systems at the hands of tyrannous ideologues is a much harder problem to solve, and in every historical example that I know about, it leads to economic disasters.

    A ‘fiscal cliff’ is not the worst problem we face.
    I suggest parafoils, and hope the experience is scenic. Might I suggest the Columbia Gorge would be a particularly scenic spot for the jump:
    http://www.fs.usda.gov/crgnsa


  7. mitakeet says:

    Thank you readerOfTeaLeaves for your post! With all the blaring noise I sometimes forget what got us into this mess. This story should be told all the time as counterpoint to the blather of the GOP and Democrats who are owned by special interests (such as our Great President). I agree that Jared should emphasize this more. As Jared has already pointed out a number of times, the Obama administration has _already_ implemented a huge amount of cost cutting ($1.5 trillion over the next decade if I recall correctly), it is time to see tax rates revert to the Clinton era (at least!) AND the cutting of lots of loopholes. As someone on the ‘bubble’ for being in the 1% (I am in the 2% for sure) I do not greet the prospects of shelling out more bucks with any enthusiasm and would have been vastly happier if Bush and company hadn’t brought us a couple of trillion in debt for two wars (one _clearly_ illegal!). However, since we are in this shitty situation and my wife won’t agree to emigration, jacking up the tax rates (since when did the expiration of a temporary decrease become an increase?) is the only way to keep our country from accelerating down the path to irrelevancy. While I would really like to see the defense budget cut in half (at least!), that shock to the economy would kick us back into recession (at least) again. The same thing with health care reform (and Obama care is nothing but a huge gift to the insurance ‘biz! No reform here!), if we suck 30% of the waste out of our health care spending (about $700 billion a year by my calculations, and something I know is do-able based on my research) that would immediately crash our economy. Cutting those two huge expenses would have to be done over a decade (at least) _while_ we are in a solid growth mode. To even consider it now is tantamount to suicide. However, if we don’t put policy in place now, for sure it won’t happen once the economy is ticking along and everyone forgets about budgets, etc.

    We need some serious people to make some serious decisions, too bad we have Congress instead.


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