Ideas At Aspen

July 1st, 2011 at 2:58 pm

I’m out at the Aspen Ideas Festival, and if you must talk economic and budget policy, I recommend doing it here.

Heard Bob Rubin give a great talk this morning.  I suspect people who view the former Treasury Sec’y as centrist at best would have been surprised to hear some of Rubin’s points (I’ll try to get the transcript up later):

–long term real wage stagnation for middle-class workers along with much too much poverty is a huge problem for our economy and a clear symptom of increased inequality.

–one solution to that problem would be more collective bargaining.  That surprised me coming from him until I recalled that Rubin wrote a joint oped a few years ago that made a similar point (I know his co-author).

–tax policy not only has to be part of the budget deal, it has to be more progressive.  Rubin expressed great dismay on how hard it was to even close the “carried interest” loophole—the one that let’s hedge fund types claim the earnings as capital gains and thus pay far lower taxes than middle-class workers.

–helping people understand what gov’t does and why it needs to be amply funded to do those things is really important and it’s increasingly hard to break through the partisan noise.

I was on panel with Sen Alan Simpson and Al Hubbard, ably moderated by Jimmy Henry on the way out of our debt and deficits problem.  A few points to consider:

–lots of agreement on the need to wrestle health care costs down but lots of confusion on the facts of that case.  EG, it was asserted that:

Medicare should be means-tested. But as my CBPP colleague Paul Van De Water will tell you, Medicare IS means-tested.  You might want it to be more means-tested, but it’s important to get this straight.

Ryan’s plan for Medicare seriously tackles the cost problem.  I just about blew a fuse on this one.  His plan shifts costs; it’s doesn’t save costs.  Peter Orszag wrote about this a few weeks ago:

“By 2030, health spending on the typical beneficiary would be more than 40 percent higher under the Ryan plan than under existing Medicare, according to the CBO report.”

This is a mistake that should be very carefully avoided in this debate.  Cost shifting is not cost saving, and without cost savings in health care, public and private, we don’t get on a sustainable fiscal path.


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4 comments in reply to "Ideas At Aspen"

  1. Kevin Rica says:

    I’ve a better idea than all that rewarmed macaroni.

    Force the PRC to float the RNB: Close the U.S. current account deficit and the U.S. economy would leave rubber!

  2. casey says:

    Jared, thank you for this post. Could you please explain why it’s so important to enact measures to bend the cost curve in the private sector, if you want to save the government money? I mean, isn’t one of the assumptions behind plans like the Ryan proposal that the private sector is more willing (and able) than Congress to be the bad guy and impose otherwise politically untenable, but needed, measures, like higher copays for less-effective procedures?

  3. PeonInChief says:

    Rubin? Isn’t he one of the guys who should be in a prison jumpsuit?