Often politicians pack so many misleading strains into a sentence that I step back in awe, almost impressed by the linguistic gymnastics.
In that regard, and speaking exclusively in policy terms, I found this framing by Gov. Romney to be deeply troubling, though potentially effective.
“The test is pretty simple. Is the program so critical, it’s worth borrowing money from China to pay for it?” Romney said of federal programs. “And on that basis of course you get rid of Obamacare, that’s the easy one. Planned Parenthood, we’re going to get rid of that. The subsidy for Amtrak, I’d eliminate that. The National Endowment for the Arts, the National Endowment for the Humanities.”
Let’s unpack this. First, there’s the reference to the feared other, China. This should be considered in the context of this type of analysis, particularly the graph showing the positive correlation between altruism (WITT) and relatedness. It’s a classic, divisive YOYO framing…oh, and I should mention that China holds 10% of our sovereign debt.
Then there’s the signally around borrowing—always bad! Except it’s not by a long shot. I don’t suppose any politician would defend it, but substantively, government borrowing an essential tool for offsetting demand contractions or supporting investments with long-term returns. The problem is not budget deficits—it’s structural budget deficits, the one’s that keep growing even when the private sector is back up and running. And in this regard, Gov. Romney’s fiscal policy is itself implicated.
Then there’s the slap at the inefficiency of government programs. But “Obamacare” isn’t close to being fully implemented yet—states are now setting up the health care exchanges at the core of the law. So we really don’t know how well it will work. What we do know is that the path to fiscal reform must incorporate a new approach to financing and delivering public and private health care (remember, cost pressures are worse in the private sector).
Though conservatives refer to its implementation as somehow optional, the Affordable Care Act is the law of the land! I don’t know how well it will work and neither does Gov. Romney (though his similar plan in MA is working pretty well). If it fails to meet its goals of coverage and cost containment, we’ll need to get under the hood and try to fix it. Or try something else. But tearing it down before it’s up makes no sense
Oh, and as a colleague pointed out, the ACA is paid for and doesn’t require borrowing (h/t, PVW).
Then there’s the usual signaling re Planned Parenthood, the National Endowments (I’m not going to defend Amtrak—though as a former VP Biden employee I should—there’s a solid rationale for the service which I’ll try to visit in a forthcoming post).
Get rid of “the other!”—don’t borrow!—fear the Chinese dragon!—take down Obamacare! The rhetoric to substance ratio in there is disturbingly high.
Of course, the central problem is his counterfactual. Ask the question, “Is it worth taxing the wealthy for?” and get very different answers.
And of course there’s an option other than borrowing – simply raise taxes, maybe on people like Romney who have money to burn, and use that money to help the less fortunate or make needed public investments. It goes without saying that that will never be a part of a 21st century Republican’s stump speech. Still, it’s remarkable that his discourse doesn’t even consider the possibility that spending can be offset with new revenues.
The fact that we’re even having these conversations points to the very severe breakdown in our education system and its effect on what people are now believing as far as facts go, and taking as reasonable policy, as far as what some politicians are throwing out there. Add a rather substantial case of national ADHD, and you have the mess we’re in. Will the voters discern fact from fiction and rational versus insane and go on to choose wisely this season? I certainly hope so, but am totally unsure.
I really think the fraction of debt owed to the Chinese is the biggest point that needs to be repeated until it gets heard. It’s almost for certain that if debt gets mentioned so does China. As Prof. Krugman has pointed out, dept is mainly money we owe ourselves. And further, it’s really taxes that have not yet been paid.
Taxes that don’t have to be paid for 10 or 30 years after 10 or 30 years of inflation.
When in our history have we not had an “unacceptable” national debt?
Pick a war that needs funding.
didn’t romney make gobs of money in part through copious use of debt?
You are indirectly referring to the common conservative refrain: “We need to run our government like a business.”
Keep in mind that is just a platitude to get votes. Although it can be dragged out like a gun when needed: cutting Amtrak for example. And then put back in the cabinet when not needed. For example, the Republicans have effectively blocked the IRS from collecting owed taxes by underfunding the department. Consider this cut and paste from a recent AARP article:
IRS data show that individuals and companies underpaid their taxes by a whopping $385 billion in 2006 alone, the most recent year for which statistics are available. “The IRS is effectively the Accounts Receivable Department of the federal government,” wrote Olson in her annual report to Congress. “If the federal government were a private company, its management would fund the Accounts Receivable Department at a level that it believed would maximize the company’s bottom line.”
Frequent changes to the tax code as well as more fraud and identity theft cases are among the factors contributing to a growing IRS workload, even as the agency’s budget declines, according to the report. Olson indicated that strains on the IRS also mean taxpayer rights are often compromised when reviews of tax returns occur because no single employee is responsible for overseeing a particular case.
IRS officials acknowledge the problem. “Budget cuts can lead to noticeable degradation of IRS efforts involving both taxpayer service and tax enforcement and can have a lasting impact on the nation’s voluntary tax compliance,” the agency said in a statement.
If you wanted to run Govt. like a business wouldn’t you want to collect money owed for services? So again, it is all just platitudes to get votes and then what I would call “situational ethics” in actual application…
Romney’s fulminating about ‘Obamacare contrasts weirdly with a post today at Barry Ritholtz’s Big Picture. The post shows an aggregation of LinkedIn data that tracks recent growth/shrinkage among (mostly white collar) employment sectors.
Significantly, in the LinkedIn stats, the health care sector is growing, but I’m pretty sure that the data in the graph does not tell the whole, intriguing story because it is hard to spot what I’d call the ‘convergence in health care delivery’ by looking at the LinkedIn stats: http://www.ritholtz.com/blog/2012/03/linkedin-industry-trends/
Many health care services are increasingly based on Internet delivery, which requires heavy investment in telecomm and (electrical) utilities. The LinkedIn graph shows increases in Internet, health and wellness, information technology, utilities, medical devices, and hospitals: all of these are converging to deliver health care services in new ways, but Romney’s rhetoric fails to recognize this reality.
One simple example of Internet-based health care delivery: I can request a prescription refill on my iPhone Walgreen’s app – but is that categorized as telecom? or retail? or health care? or wellness?
I downloaded the app for free from the App Store (software), but in addition:
— I pay AT&T a fortune monthly for the iPhone telecomm service;
— I pay Walgreen’s retail outlet when I get the prescription;
— I pay my local public utility for the electricity to recharge my iPhone.
In other words, a single prescription refill now merges: utilities, telecomm, retail, software, health, and wellness.
Consider that the smart phone is still a recent innovation, and the App Store is only about four years old; Skype is a fairly recent innovation as well, and docs are using it for medical appointments for patients who can’t afford to come to their offices. Web-based health care apps are currently being refined and implemented throughout my region.
We’re at the beginning of a new phase in health care delivery. And although it is true that not every American has a smart phone, we are seeing new models for health care delivery.
I believe that the employment implications of these new models are showing up more clearly at LinkedIn than at other sources I’ve perused. So from where I sit, at the same historical moment that the smart phone is morphing into a medical device, the GOP is howling about rolling back Obamacare.
It’ll be interesting to see what all those white collar types on LinkedIn think of Romney’s proposals.
If there’s a solid rationale for Amtrak — which, of course, there is and which should be patently obvious to all but the terminally nearsighted — then on what basis would you not defend it?
I think it takes a few paragraphs to explain which I will post soon. Bos-Wash is highly profitable but other lines are not and so it’s not obvious to everyone why they should be subsidized. The answer has to do with positive externalities of passenger rail service, which is why these subsidies exist in virtually every country.
Mitt wants to defund AMTRAK, because:
1. He doesn’t use it.
2. His family doesn’t use it.
3. His friends don’t use it.
Most programs actively opposed by the elite are programs used by the “little people.”
Mitt Robme knows that NFL and NASCAR owners are not big into the arts and humanities, and if they were they would just buy a couple artists and actors, and have them do some gardening to earn their keep, when not being “artsy fartsy.”
Don’t expect that 15% tax rate to go up on capital gains as long as we talk about stuff for the masses. Now, a little fear-mongering to use more taxes for fighters and bombers – that’s a winner.
Wait, borrowing vast sums of money from China is bad now?
But Cheney told me that deficits don’t matter!