Trickle-up Economic Stimulus and Investment

The economic news has been contradictory in the last few weeks. The bad news started the cycle with real gross domestic product decreasing at an annual rate of 2.9 percent. Good news followed with solid job growth and the lowest unemployment in five years, 6.1 percent.

Regardless of whether then economic news is good or bad overall, many people think the economy is stuck in low gear. While people at the upper end of economic ladder have seen their incomes substantially increase, those in the lower- and middle-class have seen their incomes stagnate for the last several decades.

If we want a robust economic growth that for both the short- and long-term a bold plan is needed that combines stimulus with investment in physical and human capital. The right plan would lift everybody, especially those people who have not seen economic benefit for decades.

The country anxiously awaits leadership that will provide such a plan. Neither party has produced this.

Continue reading

Bureau Chief Not Informed On Health Care: Part 2

In my  previous blog entry, I quoted Michael Scherer, the Washington Bureau Chief for Time Magazine. He said, “Health care, especially in this country, is an enormously expensive laborious undertaking, and… no one’s figured out how to do it economically and efficiently.” As I also said in my previous blog entry, this is just as true as the “earth is flat” or “the sky is red.”

In response to Scherer’s statement, one expert, Neil Buchanan, had this comment, Yeesh. ‘No one’ has figured out how to do this, as long as you exclude every advanced nation on the planet other than the U.S.

Buchanan is an economist and lawyer. Tax policy, budgeting, deficits, debt, Social Security, and health care reform are included in his areas of expertise, and he supports a single-payer system.

It is time to set the record straight and realize that we can have economic and efficient health care with a single-payer system, and to realize we do not need to live in a world where the earth is flat or the sky is red.

Bureau Chief Not Informed On Health Care

Which statement is true?

  1. The earth is flat.
  2. The sky is red.
  3. “Health care, especially in this country, is an enormously expensive laborious undertaking, and… no one’s figured out how to do it economically and efficiently.” – Michael Scherer, Washington Bureau Chief, Time Magazine on “Now with Alex Wagner” on May 22, 2014 (at about 5:45 minutes into the video).
  4. None of the above.

The correct answer is: “None of the above.” The earth is nearly spherical; the sky is blue, and there are at least 19,000 people who know how to make health care efficient and economical in this country. It can be done with a single-payer system, and legislation has been proposed that would implement single-payer, H.R. 676.

It is downright frightening that a Washington bureau chief would make such an egregious error.

Continue reading

Why Obamacare Will Be A Successful Failure: Single-payer Is The Solution

President Obama has been almost giddy, with good reason, about the success of the Affordable Care Act, aka Obamacare.  After a rocky start, the president celebrated the numbers: more than 11 million people now have insurance because of the Health Insurance Marketplace, his expansion of Medicaid and the Children’s Health Insurance Program.

Supporters of Obamacare should be cautious, however, because the ACA is doomed to fail, though it will succeed at the same time. To understand why, it is necessary to review the health care mess we had before the ACA, why the ACA will not solve this mess, and what can be done to make health care truly available and affordable to everybody.

Before the ACA, we had a deny-care system instead of a health care system. The health insurance companies were virtually unregulated and used their independence to enroll people who were unlikely to need medical care, to refuse payment of claims, or to drop coverage, often on minor technicalities, and to move individuals to policies with high deductibles and co-pays to reduce their payouts. The insurance companies’ goal was to avoid paying claims by denying care.

Continue reading

Supreme Court – Inconsistant Decisions

Yesterday (4/22/2014),  in the case on affirmative action, Schuette v. Coalition, the Supreme Court rule that voters could outlaw the use of race in college admissions. Michigan passed a voter-approved change to its constitution that banned the use of race in college admissions.

According to the SCOTUS blog writeup about the decision (emphasis mine):

Those two Justices [Antonin Scalia and Clarence Thomas], however, would have gone considerably further, and declared that no policy that takes race into account can be upheld if it is not a direct remedy for intentional racial discrimination — in other words, they would allow race-conscious programs of dealing with policies that have a more negative effect on minorities, even if that is not intended.

Continue reading

Trickle-down myth

Economist and Nobel laureate Joseph Stiglitz makes a compelling case against the Trans-Pascific Partnership trade agreement in this editorial.

At the end of the editorial, Stiglitz makes a statement that every politician and policy maker needs to know:

“Trickle-down economics is a myth.”

Stiglitz says he has repeatedly emphasized this point, but obviously many people have not received the message. So the next time anybody tries to justify any policies with trickle-down economics, tell them they are wrong and to base their policies on something that actually works.

Actions 2014

At the start of 2013, I published a list of actions that would solve the health care crisis in the United States, improve the economy, and create better government. Unfortunately, as 2014 starts, all these actions still need to be enacted, and some new ones need to be added. Here is the update list.

1. Enact single-payer health care system.

2. Properly fund programs for SNAP (food stamps), housing, etc. for people in need. Increase spending for food programs and housing programs so everybody has enough to eat and adequate housing. Extend unemployment insurance for those in need.

3. Commit to education fully. Let’s establish that class sizes should have no more than 20 students though high school and work to increase the number of teachers to meet this goal. Provide public funding for students through at least the undergraduate level of college.

4. Address income inequality by requiring that top executives pay increases or bonuses must be less than or equal to the increases or bonuses paid to employees.

5. Make gun safety laws stricter by enacting the following requirements:

  • Require background checks for anybody buying a gun.
  • Require training in gun safety.
  • Make straw man purchasing of guns illegal. Require valid gun registration to buy ammunition.
  • Allow researchers and law enforcement officials to use the gun registration database to track guns in crime.

6. Enact a stimulus bill. Debt is not the main concern now, jobs are. We can start by rebuilding infrastructure and allowing the debt ceiling to increase automatically.

7. Get rid of corporate welfare and prohibit special tax breaks (incentives) for individual companies.

8. Make the following changes to the tax code:

  • Enact a financial transaction tax.
  • Change tax laws so that only amount of income determines tax rates, not source of income.
  • Change tax laws to remove loopholes so profitable companies must pay taxes and remove tax breaks on foreign profits.
  • Change tax law to remove separate taxes on wages. Have only one federal income tax and allocate percentages to pay for Social Security and Medicare.

9. Require complete disclosure of all financial donations to politicians and political campaigns.

10. Require that all lobbyist meetings be documented with a summary of issues and what the lobbyist requested. (These should be posted every week on the Internet.)

11. Only allow citizens who are eligible to vote in an election or who can register to vote in an election to contribute to campaigns. This would require overturning Citizen’s United v. Federal Election Commission either by the Supreme Court or with a constitutional amendment.

12. Research and support clean, renewable energy.

13. Get rid of the debt ceiling. The cost to the economy is too great if the government shuts down, and many experts consider the debt ceiling unconstitutional.

14. If the government does shut down, then all members of Congress should lose wages just like other government employees.

15. Increase penalties to at least three times the profits made via fraud or other criminal acts. Too often firms engage in illegal activity and are hit with minimal fines. Not only should fines be increased, but the executives responsible should be prosecuted, and if found guilty, required to spend some serious time in jail.

Too often it is unclear what actions need to be take to improve the U.S. These actions provide a starting point for reforms that would significantly improve the quality of life in the U.S. and provide a government that is more accountable.


Equations of Equality

Black = White

Not yet, but many people are working for it and for equal rights regardless gender or sexual preference. Hopefully, at least when it comes to equality, the following equations will also become true:

  • Women = Men
  • Homosexual = Heterosexual

As we reflect on the 50th anniversary of the “I Have a Dream” speech, the recent assault on voting rights in Texas, North Carolina, Ohio, and other states show that vigilance and aggressive laws are still needed to protect the rights of citizens, especially minorities and indigents.

Indomitable spirits and actions are required to defeat the racism and discrimination that still exist. When it comes to voting, not only should we eliminate the unnecessary photo ID laws, but also we should automatically register people to vote when they become eligible. In a modern democratic society there is no reason not to.


The Right Incentives for Health Care

In The New York Times editorial today, “Obama’s Other Surprise,” Thomas Friedman says:

Obamacare is based on the notion that a main reason we pay so much more than any other industrial nation for health care, without better results, is because the incentive structure in our system is wrong. Doctors and hospitals are paid primarily for procedures and tests, not health outcomes. The goal of the health care law is to flip this fee-for-services system (which some insurance companies are emulating) to one where the government pays doctors and hospitals to keep Medicare patients healthy and the services they do render are reimbursed more for their value than volume.

Friedman continues by saying that entrepreneurs are developing applications that sift through mounds of data to find the best health outcomes. Thomas Friedman is half right. While I am not sure what notion Obamacare is based on, other than what might have been politically possible, it is true that our incentive structure is wrong. We do need to stop paying for fee-for-services, and that is part of the problem. The other problem is the for-profit insurance industry, which has high administrative costs and attempts to avoid paying for clients’ medical care. The solution is a single-payer system that establishes global budgets for health care providers. This would still leave the market open for entrepreneurs because medical providers would want the most effective care to lower costs.

Our national health care cost as a percentage of GDP is currently at least 50 percent greater than any other nation. To reduce these costs, we need to eliminate all unnecessary expenses, whether they are unnecessary medical procedures or unnecessary administrative expenses caused by insurance companies that increase costs without adding value. Currently, 84 million people will be without health insurance at some point this year.

A single-payer system would cover everybody and reduce costs providing the best and only viable solution to our current and future health care dilemmas.

Bridge Collapse

Another bridge has collapsed.  The I-5 Skagit River Bridge in Washington fell about 7 p.m. on Thursday. Like a plunging bridge, the infrastructure of the United States plunges ever closer to being like a third-world country.

The America Society of Civil Engineers’ (ASCE) most recent infrastructure Report Card gave bridges a grade of C-plus. This is better than the overall grade of D-plus, but still nothing to be proud of. If a bridge were in a family, I can just picture it saying to mom and dad, “Gee mom and dad, I did better than average.”

Washington state’s overall infrastructure grade was C with the bridges earning a C-minus. “Gee mom and dad, a C-minus is passing.”

Our infrastructure ranking has declined from 6th in the world in 2007 to 16th in 2012, and to 25th place in 2013. This dismal decline illustrates the failure of all levels of government to tax so infrastructure projects could be funded properly. The ASCE estimates that we need about $514 billion per year for 7 years to bring our infrastructure grade to a B.

We could finance infrastructure projects and jumpstart the economy by taxing the $1.7 trillion in earnings that U.S. multinational corporations have hoarded overseas. At the current tax rate, this would bring in about $595 of spending money. The excess could be used for food aid, medical care, or education.

And, perhaps one day, the bridge can say to mom and dad, “I got an A, aren’t you proud?” I know I would be.