Category Archives: deficit

All Posts, deficit, donald trump, economy

WEAR THE PATRIOT’S MASK

How should we deal with people who make our national crisis worse by refusing to adopt effective safety practices?  Over six million Americans have been diagnosed with the Covid -19.  More than 180,000 have died.  Millions more have lost jobs and the ability to support themselves.  The national debt that we must repay will soon be more than the total value of everything the nation produces in a year for the first time since the end of WWII.

Our most effective weapons in a war against the virus are:

  1. Wear a mask in public places
  2. Maintain social distance.
  3. Don’t congregate in large groups.

We lack leadership and enforcement of those practices, especially at the national level, where our President routinely denies the facts and refuses to personally adopt safe practices.  As a result, we are among the hardest hit nations in the world.

Why do we passively accept anti-social behavior from people who endanger our families and livelihoods?  Safety practices can become behavior standards for our communities and our nation when enough of us speak up directly to those who misbehave.  That won’t be a pleasant task but it is not nearly as difficult as allowing a virus to rule our lives.

Some retail clerks and managers say they fear abusive behavior and threats by anti-maskers; and that is why they don’t enforce their own rules.  Anti-maskers are getting their way through noisy intimidation and bullying.  They are impeding our war effort and allowing the virus to linger; and they will continue until responsible citizens stand up to them.  I’ve seen a few folks publicly confront those who are not doing their part.  It is uncomfortable, but I am learning to do it too.  We are at war with a virus.  Those who do not follow safety practices endanger us all.  Their traitorous behavior is unacceptable.

The death toll, economic damage, inability to operate schools normally, and other consequences of not masking, not distancing, and allowing unsafe mass gatherings is a burden that good citizens should not have to bear.  The nations in the chart above are home to freedom loving people that are succeeding against the virus.  They all have leaders who are educating the public and pushing voluntary compliance. Many also have penalties for non-compliance. Germany,

A picture of presidential leadership – the vast majority of Donald Trump’s audience was unmasked on the White House lawn to hear him accept the Republican presidential nomination.

France, Australia, South Korea, Japan, UK, and Canada have all used fines or other penalties at times when voluntary compliance didn’t work.

It’s difficult to fathom why police and prosecutors are resistant to enforcement, when laws or emergency orders are in place.  One common explanation is lack of resources, but that doesn’t stand up to close examination.  The virus is the most dangerous and immediate threat to our public safety.  Consider that police do have resources to monitor speed limit violations by radar.  Some of that time could be reallocated to routine checks of masking compliance at high risk locations.  Masking compliance could also become part of routine patrols.  If someone calls to report a mask or distancing violation, it can be triaged in the same way as other calls.  A violent crime in progress is a high priority.  Taking an in-person report of a stolen lawn mower is a lower priority.  Police make triage decisions every day and they generally do it well.

Many Americans are masking, distancing and avoiding crowds because they have believed CDC advice, because they care for others and because it’s the right thing to do.  But now the Trump administration is manipulating information from CDC and other sources to sow doubt about scientific facts.  They are misleading rather than leading their loyalists.

Americans have been watching a microscopic virus take away our schools, churches, businesses, friends and families.  The non-performance of our government at the national and local level leaves the work to individuals and private groups.  That’s why we need to have plain-talk conversations with anyone who doesn’t mask or distance; and refuse to passively accept the deaths and damage that they are causing.  Patriotic Americans do not sit idle while the nation is losing a war.  We’re running out of time and resources to fight the virus.  Think about it.  How will you help?

Click Here to see current world wide virus statistics

All Posts, budget, deficit, economy

FUNDING SOCIAL SECURITY

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It’s time for honest consideration of the problems facing Social Security but first, the good news.  The Social Security Trust Fund, from which benefits are paid, has a balance of $2.9 trillion.  The money that was deducted from our paychecks and the matching contributions from our employers built that bala Continue reading FUNDING SOCIAL SECURITY →

All Posts, budget, Congress, deficit, donald trump, economy, taxes

IS THE FINANCIAL END NEAR?

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The cartoon made me laugh. Maybe it’s funny because it’s based in truth.   Although I hope that our national litany of mini-crises and scandals will end soon, I don’t expect it.  These stormy times are distracting us from more important issues, particularly our national financial situation. Continue reading IS THE FINANCIAL END NEAR? →

All Posts, budget, Congress, deficit, economy, taxes

THE COMING FISCAL CRISIS

The caller was a friend that I haven’t seen for too long.  She’s up in years, older even than me, but as quick-witted and engaging as I remembered.  “Why”, she wanted to know, “haven’t you written about Republicans’ plan to take away deductions for medical expenses?”  Then she told me her story.  I had promised myself a respite from the tax law controversy, but it’s too important to be left alone.

Karen and her husband Jim (not their real names) are neither poor nor wealthy.  They saved and managed their money well in preparation for retirement but Jim is now ill, disabled, and in need of daily assistance in just about all of his activities.  With Karen’s help, he doesn’t have to go to a nursing home, but she can’t meet all of his needs so she pays for daily help.  Medicare and insurance don’t cover the cost.  The budget is tight but they make it work.

Under current tax law Karen can deduct medical expenses that exceed 10 percent of their income.  So, if their taxable income is $50,000 and the medical expenses not covered by insurance are $20,000, here’s how it works.  They pay an amount equal to 10 percent of income, $5000 in this case.  That leaves another $15,000 of expenses that she can deduct from their income.  So they will pay income tax on $35,000 rather than $50,000.  If they are in the 15 percent tax bracket, the deduction would save them $2250.  That’s a lot of money when you’re on a tight budget.

The fate of their deductions will be decided behind closed doors in a House-Senate Conference Committee.   The Senate version of the Republican bill will allow the deduction.  If the House version passes, Karen and Jim will be spared the trouble of keeping records because the expenses won’t be deductible.

“What can we do?” Karen asked me.  I stuttered a lot trying to find an answer.  She wrote and called congressmen.  She never got to talk to one and her perception is that their minds are made up to pass a bill quickly without considering who will be hurt.  She’ll try again anyway because neither of us knows an alternative.

The fates of Karen, Jim and millions of other Americans are in the hands of congressional Republicans who seem intent on passing a law before public opposition rises to an insurmountable level.  There have been no public hearings with expert testimony, no people like Karen explaining their concerns and few, if any, town hall meetings where legislators face voter questions. Republicans seem desperate to pass something – anything – rather than face economists, experts and angry constituents.

It’s easy to get lost in lists of tax bill losers: the sick, graduate students, the middle class, residents of high tax states, on and on.  Hundreds of issues are up for grabs.  They’re all important but to focus on any one of them is to miss the fact that we have no financial plan for our national future.  Either version of the Republican bill will add somewhere between $1 trillion and $1.5 trillion to our budget deficits in ten years, and deficits will continue after that at a similar rate.  That borrowed money will be given to corporations and the wealthiest 1 percent of Americans in the form of tax cuts.  Every American will be obligated to repay the debt.

There’s no way to make a sensible budget from the revenue that will remain after the tax cuts.  Social Security is self-funded by employee and employer contributions.  It will remain totally self-sufficient through 2036.  It needs a bit more revenue or lower expenses to be solvent past that date but its problems seem minor.   The crisis is in the rest of the budget.

Republicans have pledged to increase spending or hold it steady for defense, Medicare, and Medicaid/Health programs.  Their tax bill does not produce enough non-social security revenue to pay for anything else after keeping those promises and paying interest on the national debt.   Yes, you read it right.  They have promised to spend all federal tax revenue on defense, Medicare, Medicaid/Health and interest expense.  Did they do the math before they made the promises?

The Republican plan cuts taxes so much that there is no sensible financial path forward, just a mountain of debt.  The light that they claim to see at the end of the tunnel is a train; and it’s headed our way.

TO DOWNLOAD CHART CLICK HERE

IF REPUBLICAN TAX PLAN HAD BEEN LAW IN 2016
REVENUE
BILLIONS SOURCE
2016 FEDERAL REVENUE $3300 CONGRESSIONAL BUDGET OFFICE
LESS SOCIAL SECURITY REVENUE ($958) SOCIAL SECURITY TRUSTEES REPORT
NON SOCIAL SECURITY REVENUE $2342
LESS TAX CUT ($100) MEDIAN OF ESTIMATES
FUTURE PROJECTED REVENUE $2242
SPENDING
MEDICARE $593  

DERIVED FROM PEW RESEARCH CENTER

CLICK LINK FOR SPECIFICS
MEDICAID/HEALTH $514
DEFENSE AND VA $790
INTEREST ON DEBT $237
SUBTOTAL $2134
PROPOSED DEFENSE INCREASE $116 ESTIMATE BASED ON SENATE PROPOSAL
SPENDING PROTECTED BY REPUBLICAN PROMISES $2250
ALL OTHER 2016 SPENDING $869
PROJECTED DEFICIT $877
All Posts, deficit, donald trump, taxes

IT’S A WONDERFUL LIFE – TAX FREE

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President Trump and Congressional leaders have promised Americans Christmas presents including lower taxes for everyone and raises for the working middle class averaging $4000 per year.  Even Santa can’t match that magic.

As I draft this column, the plan is that Republican leadership will propose a new tax law to the House Ways and Means Committee (whose job it is to draft tax laws) on November 1 with a request that they approve it in a matter of a few days.  It is being prepared in secret by two cabinet members and four politicians who are leaders in the House and Senate.  They’re all male, all white, and all Republican so we don’t need to worry.  They know what’s best and they’ll take care of us.

The goal of the bill’s authors is to get it passed before the end of 2017, allowing less than two months for committee hearings, expert analysis, and public opinion.   They say that they want to move quickly before lobbyists put on too much pressure for special interests.  Maybe they’re also concerned about having those pesky town hall meetings where noisy constituents ask hard questions.

The tax proposal is supposedly derived in large part from the House of Representatives GOP Tax Plan so we can look there for a preview.  It was evaluated meticulously by the Brookings Tax Policy Center.  They created a straightforward estimate of the bottom line change in taxes for Americans at all income levels.  Naturally some of us will fare a bit better than others.  You can check this chart to see how much help your family would get.  CLICK HERE for the entire Brookings report.

HOW HOUSE GOP TAX PLAN AFFECTS FAMILY INCOMES
Income Level Average tax saving/year
Lowest 20% -$50
Middle 20% -$260
Highest 20% -$11,760
Highest 1 % -$212,660
Highest 0.1% -$1,262,530
SOURCE:

http://www.taxpolicycenter.org/publications/analysis-house-gop-tax-plan/full

You may recall that our federal budget already runs a large annual deficit.  Republicans plan to borrow more money to make up for the tax cuts.  In order to get your tax savings, your share of the additional borrowing will be about $4600 per person plus annual interest at about 3 percent.  Republicans no longer  worry about debt since President Trump explained that if the economy goes bad, we can “make a deal” to cover the debt.  These guys are so smart about money that they know how to make debt disappear.  They’ll do what’s best for us.

President Trump says that the extremely rich people will invest their tax savings and that will create more jobs.  If there are more jobs then there will be more demand for workers so everyone’s wages will go up by an average of $4,000 per year.  Mr Trump said that we can be confident; it’s actually middle class and low-income people who will benefit most from this plan.  It’s so beautiful that it makes me want to sing along with Merle Haggard’s old song, “We’ll all be drinking that free Bubble-Up and eatin’ that rainbow stew.”

The new law would also make changes to corporate taxes; something that most knowledgeable people agree is needed. Isn’t it great to have such hard-working leaders applying the skills they learned at places like Goldman Sachs so that we don’t have to listen to experts or think for ourselves?  It’s especially considerate of our six great leaders to get all the work done so that the congressional committees that would otherwise need to carefully consider the law can be finished with it in time to enjoy the holidays with their families and friends.

Merry Christmas to all Americans from your congressional leadership – always doing the thinking for American families and protecting their interests.  In case you’d like to send them a “thank you” note, they are Treasury Secretary Steven Mnuchin, Trump economic advisor Gary Cohn, House Speaker Paul Ryan, House Ways and Means chairman Kevin Brady, Senate Majority Leader Mitch McConnell, and Senate Finance chairman Orrin Hatch.

One parting thought – this is the time when Americans must decide whether we want to live our “wonderful lives” in Pottersville or Bedford Falls. (Many references are to the movie “It’s a Wonderful Life” – as inspiring today as ever.)

ADDITIONAL READING:  https://www.politico.com/story/2017/09/27/everything-you-need-to-know-about-the-big-6-tax-plan-243205

 

All Posts, American Foreign Policy, budget, Congress, deficit, donald trump, medicaid, taxes

THE PRESIDENT OF CHAOS

The picture on my computer screen should be better so I tried adjusting it.  That made it worse so I’ll hit it with a sledgehammer and see if that helps.  Unfortunately, that foolish approach is being applied by President Trump to vital national interests like health care,  defense,  immigration, and budgets.

One of Trump’s competitors, Jeb Bush predicted the problem back in 2015 saying,  “Donald, you know, is great at the one-liners.  But he’s a chaos candidate.  And he’d be a chaos president.  He would not be the commander-in-chief we need to keep our country safe.”

Never a dull moment...
Never a dull moment…

President Trump promised to repeal and replace Obamacare with something better: “We’re going to have insurance for everybody…There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.”…“I was the first & only potential GOP candidate to state there will be no cuts to Social Security, Medicare & Medicaid”.

As President, Trump never proposed a way to provide health care regardless of Americans’ ability to pay for it and he did support cutting Medicaid.  Obamacare has insured about 20 million Americans who had no benefits before the law passed; and at the same time it has slowed the growth of the nation’s healthcare spending.  It’s a success but it needs improvement.  When nothing that he or other Republicans proposed passed, Trump swung his sledgehammer at Obamacare’s most vulnerable spot, the individual markets.  He announced termination of the federal  subsidy to insurance companies for low-income subscribers.  That will damage the already fragile individual insurance markets in some communities – breaking our healthcare system without a plan to replace it.

Trump threatens to withdraw from our agreement with Iran, under which they shut down their nuclear weapons program and gave up 98 percent of their nuclear materials.  The agreement was designed with one goal in mind – don’t let Iran develop  nuclear weapons.  We managed to get Russia, all of Europe and China on the same page because they all agreed with that goal; and it was our combined power that made the deal possible.  Trump can’t persuade Iran to do other things that he wants so out comes the sledgehammer to break the Iran agreement.  If the deal falls apart and if China, Russia and Europe go their own ways, there will be nothing to restrain Iran’s nuclear ambitions.  By destroying the Iran deal without a plan to replace it Trump also tells other nations  that any President can ignore commitments made by his predecessors.  The USA will be seen as untrustworthy.

The DACA program for children brought to the US illegally is an imperfect solution to a problem that congress has been unwilling to address.  Trump promises to hit it with his sledgehammer – forcing law enforcement to round-up and deport children and young adults who have lived most of their lives as Americans.  Again, he has no plan for replacing what he will destroy.  Many young adults will be driven to hide in an underground economy where they have little opportunity for success.  That’s a breeding ground for dissension, hopelessness and crime.

Trump plans to hit your wallet with a sledgehammer too – by cutting taxes, mostly for the wealthy, while increasing military spending and  our national debt at even faster rates than his predecessors.  Americans will have to repay that debt at some future date.  Our ability to borrow money for a true catastrophe or war is already impaired because so much of our debt capacity has been used.  We currently owe $20 trillion.  That is about $62,000 for every American or $161,600 for every American who works at a full or part-time job.

Donald Trump again proposes the sledgehammer approach saying,  “I am the king of debt,”…”I love debt. I love playing with it.”  and “I would borrow, knowing that if the economy crashed, you could make a deal”…”And if the economy was good, it was good. So therefore, you can’t lose.”  When he says “make a deal”, that means refusing to pay our debt, most of which is owed to Americans.  It’s not the same as letting one of his casinos go bankrupt.

If the Republican congress allows President Trump to deliver more sledgehammer blows to our nation, the resulting chaos will belong personally to Donald Trump and each legislator who supported him.  The GOP will own the chaos but the American people (including DACA kids) will pay a heavy price for it.

All Posts, budget, Congress, deficit, economy

MAKING OUR INFRASTRUCTURE GREAT AGAIN

We must maintain our existing infrastructure while we build more of it; and we need to agree on how to do that.  One guiding principle for those decisions is “TANSTAAFL”.  That’s the acronym for “There ain’t no such thing as a free lunch”.  Infrastructure is expensive.

The report card on American infrastructure published by the American Society of Civil Engineers (ASCE) is probably the most comprehensive analysis available.  It identifies a multitude of current and anticipated concerns.  Our Congress has paid only scant attention to ASCE warnings about our backlog of maintenance and construction needs.

President Trump has proposed spending $1 Trillion on infrastructure over the coming decade and has pointed out that a lot of new jobs could be created through such a program. He has yet to clarify how projects would be selected, who would own them and how they would be funded.

Our existing infrastructure has been built and is owned by a sometimes bewildering mix of local, state, regional and national government entities along with utility companies, railroads, airport authorities, and various kinds of public-private partnerships.  Sometimes, as in the case of abandoned dams and waste disposal sites, ownership is not clearly identified.

Even if the congress could agree on a way to standardize and prioritize our infrastructure ownership and financing, it would probably be a bad idea.  The ways of doing things that work well in rural America are often different from the best ways to do things in urban areas.  The process of deciding what to build, how much government money to spend and how to organize the effort will necessarily be complicated, messy, and sometimes controversial.  Despite that, it’s worth doing.

We should look back at the last serious effort to renew our infrastructure in hopes that this effort will succeed where the last one failed – in the United States Senate.  In 2011, President Obama proposed a more modest and more specific infrastructure plan that called for $50 billion in federal spending on highway, rail, airport and transit improvements plus another $10 billion to start a “National Infrastructure Bank” intended to spur public-private partnerships.  The proposal passed the Senate by a 51-49 vote but was blocked by a Republican filibuster – as were most Obama initiatives.

President Obama proposed to pay for his plan by imposing a surtax of 7/10 of one percent on incomes in excess of $1 million.  President Trump’s more ambitious proposal appears to call for $200 billion in federal spending plus unspecified local and state spending and unspecified private spending accounting for the rest of the $1 trillion price tag.  He has not announced a plan to pay for it other than by mentioning that our low interest rates make this an inexpensive time to borrow money.

This complicated but important issue is the kind that our traditional Congressional procedures were designed to address.  Advice from experts will be needed, followed by a great deal of negotiation and compromise. There is no perfect plan for such complex needs.  There will be negotiations to determine which states and communities get their projects approved.  Every decision will be subject to criticism and second-guessing.   That’s how it was with big federal projects like the Tennessee Valley Authority and facilities for NASA, our armed forces and other federal departments.  The planning was complex and  controversial but certainly worth the trouble.

Leaders in both political parties know that our national infrastructure needs renewal and expansion.  Both parties have proposed it when they were in power.  Are they up to the task of responsibly designing a way to achieve and pay for that ambitious goal?  Their predecessors in the 1930s through the 1960s figured out how to establish a national power grid, phone service, interstate highways, NASA, hydroelectric dams, public water and sewer systems, national parks, airports, hospitals, schools…the list goes on.  They facilitated public-private collaboration in ways that worked for American citizens – things like blending rural utility co-ops, private utility companies, and municipally owned utilities into national electric, gas, and phone systems.

Today about 18 million Americans are served by water systems that violate lead safety standards.  That’s just one example of our problems.  There are similar concerns in every category of infrastructure and there are no simple answers.  We need a congress that is willing to do their homework and make hard decisions on behalf of the citizens who elected them.  That can happen if voters demand it.  TANSTAAFL.

All Posts, budget, deficit, donald trump, economy

Paying Donald Trump’s Taxes

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“If this is what happens when you vote Republican, then why vote Republican?” – Rush Limbaugh, May 1, 2017.  It’s a good question.

The most thorough analysis to date of President Trump’s tax plan is winners in trump tax planthe Tax Policy Center’s report  on a very similar plan that he proposed last year.  It projects that the 20 percent of Americans with the lowest incomes would gain $110 annually.  The 20 percent with middle incomes would gain $1010.  The 20 percent with the highest incomes would gain $16,660.  And, most stunning of all, the one tenth of one percent of Americans with the highest incomes would save $1,066,460 every year.

That will be paid for by increasing our federal deficits and debt at the rate of more than $700 billion per year.  Every year, every American (even children who can’t vote) will become responsible for repaying $2153 in new debt. Counting principal and interest, Trump’s tax plan would burden every child born in 2017 with about $64,000 in new debt by their twenty-first birthdays.

That’s a great deal for children born into extremely wealthy families because they will get over a million dollars a year in tax savings.  But for a child born to a poor or middle class family, the debt will be a barrier to success in a nation that can’t continue living on borrowed money.  Here are a few examples of what President Trump is trying to sell us and some alternative reforms that would serve the nation better.

Trump’s plan would eliminate the estate tax.  He calls it a “death tax” and says it impedes the inheritance of small businesses and family farms.  But the estate tax only applies to assets in excess of $10.9 million passed on by a married couple (half of that for an individual).  Repealing the estate tax will allow heirs of the super-rich to receive millions of dollars as tax-free inheritances while those who work for their money pay income taxes.  This idea is the ultimate example of an entitlement mentality among American aristocracy.  If President Trump has been truthful about his net worth, the estate tax repeal will allow his heirs to receive $10 billion tax free.

How is an inheritance not income?  Some of the wealthy will argue that they already paid income taxes on the money to be passed on.  I hope that is true.  When a middle class family pays to have their home repainted, they have already paid taxes on that money.  The painter will be taxed on his income too.  Taxing earned money while not taxing inherited money – what a way for the President to treat the blue-collar workers who elected him!

President Trump wants to eliminate most itemized deductions but keep the one for mortgage interest. It serves the purpose of making home ownership easier but wealthy Americans frequently mortgage homes and use the proceeds to pay for second homes or income producing investments.  With that in mind, we should cap the size of deductible mortgages at an amount that subsidizes ownership of a nice home.  There is no justification for subsidizing million dollar mortgages.

The President wants to cap corporate taxes at 15%, which he says will encourage business expansion here by making our taxes competitive and slightly lower than other nations.  He’s right about that.  Corporations should be viewed as tax collectors not as tax payers.  They collect from customers and then pass some of their income along as taxes.

A better idea is to pass the tax liability for corporate profits (and deductions for losses) along to shareholders at whatever rate they pay on earned income.  This will allow lower-income families to invest and begin accumulating wealth while paying low or no tax.  Those with higher incomes would pay more.  Under that policy, each taxpayer would pay the same rate on wages as on investment income.

Our tax code offers more advantages for the extremely wealthy than can be covered in a column of this kind.  The Trump plan will move us further down the road toward establishment of an entitled American aristocracy – exactly the wrong direction to go if we want upward mobility into the middle class and beyond.

President Trump’s proposal is the proverbial pig wearing lipstick.  This pig would require every American to borrow money that will pay for tax cuts for the extremely wealthy.  Its lipstick, some nearly inconsequential tax cuts for the poor and middle class, is a thin disguise.

Links for additional reading:

https://www.theatlantic.com/business/archive/2017/04/a-comprehensive-guide-to-donald-trumps-tax-proposal/524451/

https://www.bloomberg.com/politics/articles/2016-12-09/estate-tax-repeal-under-trump-would-benefit-president-cabinet

https://www.nytimes.com/2017/04/26/upshot/winners-and-losers-in-the-trump-tax-plan.html

http://www.foxbusiness.com/politics/2017/04/25/stockman-trumps-tax-plan-dead-before-arrival.html

How high are American taxes compared to other nations?  CLICK THIS LINK: https://data.oecd.org/gga/general-government-revenue.htm#indicator-chart

All Posts, budget, deficit, taxes

FEEDING OUR DINOSAURS

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I was rambling around the house trying to mentally outline a column about tax policy when my wife asked me to fill the dinosaur feeder in our back yard.  Actually she called it a bird feeder but we’ve only recently learned that birds are evolutionary descendants of dinosaurs, so we haven’t adjusted our language.

Feeding a dinosaur is less complicated than revising the tax code.
Feeding a dinosaur is less complicated than revising the tax code.

Thinking about how dinosaurs became birds is easier than imagining the how American tax code could evolve into something as practical as a chicken, so I changed the subject and my day is already better.

For the dinosaurs, the transition took a long time – something in the neighborhood of 150 million years is a widely accepted estimate.  Dinosaurs didn’t need to elect a congress to create their future, they just adapted as best they could to changes in their environment, including the evolution of other animals and plants, and let nature take its course.  Judging from the number and variety of them now having brunch outside my window, the dinosaurs may be slow, but they have been successful.

We humans haven’t been around nearly as long as the dinosaurs, or even as long as the birds.  We’re evolutionary newcomers but most of us think we’re superior to the creatures sharing our back yards because we have sophisticated languages that we can speak and write to convey complicated ideas to future generations.  Our “superiority” has produced science, literature, mathematics, religion, art, music, clothing, big buildings (and the American tax code).

Along our evolutionary way, we created customary ways of doing things that allow our descendants to survive and thrive.  We build homes to shelter them.  We feed them, teach them, and keep them safe as best we can.  As I look around in my yard, I can see squirrels and dinosaurs (ok – birds) working at those same things.  It seems that evolution or creation (or God if you prefer) built the desire to do those things right into our DNA.  We are here today because our ancestors, going back millions of years, had successful families to care for their young.

As I watch the dinosaurs in my yard, they seem to be fully occupied in the present, the recent past and the near-term future.  They are building nests that will be temporary, eating, and enjoying active sex lives.  The squirrels still seem to be digging up some of last year’s acorns.  Mostly they are living in the present but any observer can see their values – the sense of right and wrong that will assure the success of their families and their coming generations.  Evolution rewards such behavior with survival and adaptation.

We humans expanded mutual support beyond family into neighborhoods, villages and cultures.  We specialized, filling particular roles that help the whole group.  Ants, bees, beavers, wolves, buffalo and others did that too and it worked for all of us.

With our long-term social memory, passed down by word of mouth and later in written form we humans are able to record our values as stories, religions, and laws.  We’ve learned to use those as organizing principles for large societies – even empires.  Incas, Masai, Cherokee, Egyptians, Chinese, Romans, and recently Americans organized themselves so that future generations could succeed. Their laws, customs and religions supported societies where future generations could thrive.  That appears to have worked for all of them.  But eventually some things need improvement.

The evolution of cultures seems to be a lot like the evolution of living species.  Some have been overrun by more powerful competitors.  Some fell prey to droughts, or natural disasters.  Some fell when they were unable or unwilling to support their families and societies so their young could thrive in future generations.  Dinosaurs became birds in order to thrive in a changing world.  Romans became Christians and brought much of the western world along in the process before their empire collapsed.   America emerged from that, much as birds emerged from dinosaurs – becoming a new creature that fed and supported each new generation toward ever greater success.

That, unfortunately, brings me back to the American tax code.  Our congress will soon begin debating it.  In our large and complicated nation, the tax code should collect resources from us and direct them toward creating a nation where all can achieve our potential and succeed together.  Will we use it to evolve as dinosaurs did?  Or will we become extinct?

 

All Posts, deficit, health, medicaid

Replacing Obamacare

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President Trump and our Republican controlled congress have promised to quickly repeal and replace ObamaCare.  President Trump says that coverage will be better, cost will be lower, and everyone will be covered.

We should consider where we were before ObamaCare and where we are today as a basis for judging proposed replacements.  Using the years 2004 – 2009 as a baseline for how we were doing before ObamaCare and 2010 – 2015 as a measure of its effectiveness, here are some facts.

Each of the following statistics is for five years of change before and after ObamaCare.   All spending is inflation adjusted to 2010 dollars.

Below is similar cost data from a different source and a link that will allow you to browse a wealth of relevant information.

The cost of employer sponsored health plans has been growing slower since ObamaCare.
The cost of employer sponsored health plans has been growing slower since ObamaCare.

Evaluate performance data from the US and other developed nations HERE using tools developed by the Organization for Economic Cooperation and Development.

 

 

Some other changes brought about by ObamaCare are:

  • Before ObamaCare, important screenings like colonoscopies and mammograms were unaffordable for many people.  Now they are covered without deductibles.
  • Insurance companies and employers can no longer deny coverage or charge more for pre-existing conditions.  Previously, cancer survivors, diabetics and others likely to need expensive care were uninsurable on most family budgets.
  • Lifetime limits on coverage were banned.
  • Mental health services are covered on the same basis as other medical and surgical services
  • Dependents can stay on parents’ coverage up to age 26.

ObamaCare is a success compared to what we had before it passed.  But health care costs are still rising faster than our economy is growing and we still have over 28 million uninsured Americans so more improvement is needed.

The ObamaCare insurance exchanges where individuals and small employers should be able to purchase affordable coverage are not consistently working well .  Millions of young, healthy Americans are not buying coverage as required by the law.  That leaves a disproportionate number of unhealthy and older people in these insurance pools.  In markets where that has happened, premiums have risen at double-digit rates and several insurance companies dropped out, leaving meager choices for consumers.

That problem leads directly to critical questions about replacing ObamaCare.  Will congress decide that it’s acceptable for some Americans to have no health benefits?  If everyone is going to have benefits, is there a less expensive alternative than Medicaid expansion?  If so, will it be included in the Republican replacement for ObamaCare?  If not, will it then be acceptable for doctors, hospitals and other health care providers to deny services to those who can’t pay?  To be very clear to free market friends, “There ain’t no such thing as a free lunch.”  If the ObamaCare replacement does not include a way to pay for care of the uninsured then either they will die without care or the cost will be built into your bills and insurance premiums.

There are proven ways to provide more care for less money while covering the entire population.  Every other developed nation has adopted one of them and they are all more cost-effective than ObamaCare.  They range from price controls to “medicare for all” or government operated health care similar to the British model.  All of them require a larger role for government and that seems to be the antithesis of Republican thinking.  President Trump said that no one should be required to buy health insurance.  At present it appears that he intends to provide something (health care) for everyone without requiring anyone to pay for it – a miracle of biblical proportion.

We can hope that the post-election hostility will wane in favor of intelligent consideration of how to replace or improve ObamaCare. It can be done if legislators and the President are willing to forego political rhetoric for what is practical.  If they are not, then both human and economic catastrophes are likely.