Wednesday, December 28, 2011
In Iowa, voters meet in 1,784 different locations across the state. They actually debate, in these small groups, why those in attendance should vote for their guy. The main advantage that Ron Paul possesses is a devoted following of Atlas Shrugged-wielding libertarians, as demonstrated by his frequently-successful "moneybomb" fundraisers and his legion of supporters on social media sites like Reddit. The ferocity of his support is extremely useful in any contest that is usually low-turnout, such as the caucuses in Iowa. More importantly, many Paul supporters have lived and breathed his ideas and philosophies since his 2008 campaign and are able to . In a setting where debate is allowed immediately prior to caucus-goers casting their votes, Paul-ites will disproportionately swing undecided and weakly-affiliated voters to their guy.
So I'm predicting a Ron Paul victory in Iowa. It will throw the Republican race WIDE open.
Looking at the primary calendar, a Ron Paul win in Iowa would be followed by New Hampshire, where a Mitt Romney victory is almost guaranteed. Next up are primaries in the South, in South Carolina and Florida, where Newt, from neighboring Georgia, has big leads. Then they move out west to Nevada, where Romney will likely win. After that comes Colorado and Arizona, where Newt's polled well. Then a likely Romney win in Michigan, where his father was a popular governor, takes us to Super Tuesday, where anything can happen as 11 states vote.
The only way the Republican race ends quickly is if Mitt Romney runs the table. Based on how the map looks now, it is unlikely that he will do so, ruining his inevitability/electability argument, which is his strongest pull with Republican voters. A Ron Paul win, coupled with early Gingrich wins in states he holds advantages, ensures a long contest.
Which would be great for the President. The longer the primaries go, the longer Obama's eventual opponent will have to cater to the Republican Party base. Unlike the 2008 Democratic contest, where Obama and Hillary Clinton got loads of free press taking not-over-the-top-liberal positions, the Republicans will be forced to take hard-right positions for months. Obama will have millions upon millions of dollars to run a general campaign from the beginning, claiming the center while Republicans fight with each other for the base.
Thursday, December 22, 2011
We're now 12 days away from the Iowa caucuses. Here's a summary of all the polling in the state since April. The lead has gone from Romney, to Bachmann, to Perry, back to Romney for a couple days, then to Cain, then Gingrich, now Ron Paul.
The prospect of a Paul win has been scaring the hell out of the Republican establishment, with the Iowa governor advising voters in other states to ignore the result if Paul wins. And he very well might pull it off, given his current lead in the polls and the strength and dedication of his organization. A major factor that's been holding back his campaign is a lack of media coverage. A win in Iowa would change that.
But a win is far from a certainty. As we saw after Newt Gingrich's rise, the knives will come out against whoever the frontrunner is. And, at least among the Republican electorate, Paul is extremely vulnerable to attacks. While voters would respect his economic views, his non-interventionist foreign policy is diametrically opposed to the traditional Republican approach. The other candidates' campaigns, and their super-PAC, will likely spend much of the next 12 days exploiting this vulnerability.
So I don't have a fucking clue who's going to finish anywhere from 1st-6th; pretty sure Huntsman will be 7th, but that's it. I think it's unlikely that Bachmann, Perry or Santorum would win it all, but any of them could finish a strong 2nd. With Romney's big New Hampshire lead, the result there almost certainly won't be "news", so the Iowa winner will likely get an even bigger boost than normal.
While I still think Romney wins the nomination, the shape the race will take is very much up in the air.
Tuesday, December 6, 2011
Sounds easy, right? Just keep things where they are (or cut a penny), and presto, it's all fixed! No sweat.
This might indeed be a relatively easy, were the United States demographically-stable. Unfortunately, ours is an aging population. In the midst of either DeMint's or Mack's plan, millions of Baby Boomers will retire, further swelling the Medicare and Social Security rolls and of course leading to a huge increase in government spending. Were one of these "freeze" plans in place, there would have to be dramatic cuts in discretionary spending to stay under the caps these Republicans would impose.
Rep. Mack and Sen. DeMint are of course well within their rights to present these cuts. But it is dishonest to present these cuts as easy and painless.
As discussed in my very first post of this cycle, most voters are woefully ignorant about the federal budget. When people don't know anything, it's easy to say "let's just freeze spending" and have voters think "Yeah! The government spends too much already! It would be easy to just not grow for a few years". With our clueless electorate, it just might work.
Saturday, December 3, 2011
He'll also become more likely to beat Romney. Cain being out of the running means the "anti-Romney" vote is split one fewer way, meaning Romney's amazingly-stable 20-25% in the polls less likely to hold up.
Wednesday, November 30, 2011
So seriously, fuck Michele Bachmann. This episode clearly demonstrates that she is willing to completely talk out of her ass on important matters. This wasn't a gaffe or a blunder. It was taking a policy position without having the slightest clue about the facts of the policy. It is indefensible, and it shows she has no place in public discourse.
Tuesday, November 29, 2011
After Gingrich's resignation as Speaker, he spent the next decade making money off of his name and his connections in Washington. He set up numerous for-profit organizations to this end. These organizations are all located on K Street (as Rachel Maddow discussed yesterday; jump to 5:30 for the relevant section). He received at least $37 million just from health care organizations. While he never officially registered as a lobbyist, it's safe to assume that they weren't just paying him tens of millions for his perspective as a historian.
The Tea Party would lose all of its credibility if Newt, a literal creature of K Street, were to become the nominee. It would mark the completion of the Republican establishment's mission to subsume the Tea Party movement.
Thursday, November 10, 2011
Perry committed a huge blunder in the debate. He was attempting to discuss his plans to eliminate three cabinet departments, then couldn't name which three. He got Commerce and Education, but forgot the Energy Department.
If Romney, Gingrich, Huntsman, Santorum or Paul would have committed this mistake, it might not have been so bad for their chances. For Perry, however, the gaffe played into an already-established narrative that he's, to be blunt, too dumb to be President. This reinforcing nature of the gaffe is what makes it so fatal, just like Howard Dean's "I have a scream" moment killed him because it reinforced that he was unstable/angry or why Dan Quayle's "potatoe" gaffe defined his legacy.
It is, frankly, unacceptable for a Presidential candidate to not be able to rattle off every cabinet department, or at least the ones he plans to eliminate. Perry should have been able to catch himself, start a list of each department and arrive at the right one.
This gaffe will undoubtedly be run again and again on the news, and I think we can all predict with a fair degree of certainty what Saturday Night Live will open with this week. I predict that this will lead to a discussion of the intellectual requirements to be President, and that this (along with the sexual harassment stuff) will end Cain's reign at/near the top.
So why Gingrich? Truly, it's largely a process of elimination. Perry, Cain and Bachmann have already had their shot (and fail the intelligence test), Paul's too out there, Santorum and Huntsman too unknown, and Romney's Romney, so it's Gingrich's turn. He certainly meets the intelligence requirement. He's a true conservative, with 1994 Contract with America credentials. Perry and Cain are going down, and voters won't settle on Romney yet, so it's Newt's turn.
Does Newt have a chance of being the nominee? I truly doubt it. With the intensified attention that will come with improving in the polls, people will remember about his "right-wing social engineering" remark, his serial affairs, his ethics issues that led to reprimand by the House, etc. But for now, when poll respondents only remember the 1994 revolution and his recent debate performances, he'll have a rise.
But after his inevitable fall, we'll be left with Romney. I think Santorum's social stances are too extreme even for the modern Republican Party, and he's just not that likeable. Huntsman is too moderate/reasonable. So they're left with Romney. As previously discussed, I'm OK with that.
Wednesday, November 9, 2011
First, the numbers. Perry proposes to offer every taxpayer a choice between the current system and a flat tax of 20%. It also eliminates taxes on capital gains, the estate tax, increases personal exemptions to $12,500 per person in the household, and greatly reduces corporate taxes on profits earned overseas. It does not change the payroll tax.
Now, the math. So far as I can tell, the plan eliminates the Earned Income Tax Credit, which as previously discussed would be a disaster for the working poor. In a sane world, proposing to end an effective tool to help the poor which was instituted by Ronald Reagan would carry a political cost. In today's Republican Party, however, the problem is apparently the 47% of Americans who only pay sales, payroll, state/local and property taxes but don't pay federal income taxes, so screwing the poor is accepted party doctrine.
Where Perry's plan is politically superior to Cain's is its effects on the middle class. As previously discussed, Cain's plan would raise taxes on the average family of 4 by about $3,000 a year. For the vast majority (84%) of taxpayers, they could do the math and find that they would pay more under 9-9-9. Regardless of the arguments one might make for a tax proposal, if a vast majority of voters find it hurts them, it's probably not going to do very well at the end of the day.
Under Perry's plan, our family of 4 making $50,000 sees its federal income tax burden fall to $0, thanks to the increased personal exemption: $50,000 - 4 x $12,500 = 0 taxable income. Families making more than $50,000, their tax bill goes down under Perry's plan, except for a narrow band of people whose income is right around where the current income tax rate goes from 15% to 25%, which is $69,000 after deductions/exemptions. These people wouldn't actually see their taxes go up either, as they're allowed to choose to remain with the current plan.
For the rich, whose current income tax rate is 35%, 20% is a pretty great deal, particularly when they get to keep the mortgage interest deduction. The deduction actually phases out for incomes over $500,000, but the income tax rate savings more than make up for the phase-out. The wealthy also make a much larger percentage of their income from capital gains, the taxes on which drop from 15% to 0% under Perry's plan. They also no longer have to pay estate taxes, which only applies to estates of $5 million or more and currently tops out at 35%.
Cain's 9-9-9 plan at least attempts to be revenue-neutral (i.e., bring in as much money as the current code). Perry's plan would bring in much less revenue, exploding the deficit. Mainstream Republicans are under the impression that tax cuts for the rich are inherently revenue-neutral. They base this on the Laffer Curve, which states that there exists a level of taxation above which tax revenue will actually go down. While such a level exists, it's above the level of taxation where we currently are, so lowering tax rates will lower revenue, despite what Perry and others would have us believe.
Perry's plan would be terrible for the country, as the deficit would grow even more and force huge cuts in government programs. But, because taxes will go down on the middle class and way, way down for the rich, it is more politically palatable to voters, particularly those who put us at the wrong point on the Laffer Curve. By introducing the plan, Perry has positioned himself to potentially capitalize on an eventual Cain demise.
(*: I don't really care to comment on the particulars of the allegations against Cain. If you're interested in the story, www.politico.com has been the best source)
Wednesday, October 26, 2011
-His previously-discussed ignorance of the Palestinian Right of Return, a fairly major element in the Israel-Palestine conflict.
-His ignorance of neoconservatism, the dominant foreign policy idea in the Republican Party in the past 15 years.
-His proud ignorance of details of foreign countries and foreign leaders; "Uzbeki-beki-beki-beki-stan-stan".
-Most damning are his fumbles of questions on abortion, a topic he should be strong on given the prominent role it played in his 2004 run for Senate. In an interview with John Stossel about 3 months ago, Cain gives completely contradictory answers in back to back sentences. The clip really is worth watching; it's just over a minute, and the other guest's response to Cain's literally-jaw-dropping answer is worth the price of admission.
-On Meet the Press, he said he did not support abortion under any circumstances but then said abortion in the case of a threat to the life of the mother would have to be made by the family. Not as self-contradictory as the Stossel interview, but not crystal clear either.
-He further muddied the waters on his abortion stance in an interview with Piers Morgan, where he again seemed to indicate it wasn't the government's role to make the choice on abortion.
What concerns me most about the repeated poor responses on abortion is that neither the candidate nor his team thought to tighten up the answers. After the Stossel interview months ago, an intelligent/savvy politician would have spent some time to figure out a way to clearly convey his stance on this issue, which is a particularly important one in Iowa and throughout a Republican primary.
Republican voters should be hopeful that Cain's campaign mirrors that of Ross Perot. By making tax reform a central issue in his campaign, he is influencing the debate, just like Perot did in '92 on deficit and spending issues. But should Cain's lead in the polls carry him to the nomination, I'm supremely confident of four more years for Obama, and likely big gains in Congress as well.
Friday, October 21, 2011
So, let's fire up the arithmetic machine and see what effect 9-9-9 would have on the average family of 4 living at the poverty line. For a family of four, the poverty line is at $22,050, so let's look at a family making $22,000 a year. Sneak preview, they will be $6,878* worse off should 9-9-9 (which is 9-0-9 for them) come to pass:
-McDonald's has to pay 7.65% in payroll taxes, so they have to spend $23,683 to hire a worker with a $22,000 salary, with the extra $1,683 going to Uncle Sam
-The family also must pay 7.65% in payroll taxes, so there goes another $1,683
-The standard deduction for a married couple is $11,400, dropping their taxable income to $10,600
-The personal exemption ($3,650 per family member) drops their taxable income to $0
-As you might expect, this drops their owed income tax to $0
-Not only do they not owe any income taxes, they get additional, refundable credits, including:
-Earned Income Tax Credit (.pdf, Page 46): For a family of 4 making $22,000, they would get a tax credit of $4,917. This credit is refundable (i.e., they get a check from the government for $4,917 every year
-Child Tax Credit: Under current law, after the stimulus peters out, our family would get a $1,417 refundable tax credit (it'd be $2,000 today)
So the family's total tax bill would be $1,683 in payroll taxes, plus $1,683 that their employer pays. They get a credit of $6,334. So their personal tax bill is currently a net credit of $4,651, or $2,968 when you include the employer's portion, which you should.
Now President Cain institutes 9-9-9 (or 9-0-9 for the poor). In the process, he completely eliminates the Earned Income Tax Credit and the Child Tax Credit. Here's the math:
-McDonald's is still willing to spend $23,683 to employ the family's breadwinner ($22,000 + employer's contribution toward Social Security and Medicare)
-Under Cain's plan, McDonald's has to pay a 9% tax on that money, reducing the gross pay of the family to $21,551, since 9% is more than 7.65%, with the other $2,132 going to Uncle Sam.
-The family will, according to the Consumer Expenditure Survey, be expected to spend even more than their income (i.e., go into debt) every year. Let's assume they just spend their income.
-If you were to spend $21,551 including a 9% sales tax, you'd spend $19,772 on stuff and $1,779 in taxes.
So our family pays $1,779 in direct taxes, or $3,910 if you include the employer's portion, which you should.
Herman Cain's 9-9-9 plan, even with the 9-0-9 change, changes the tax bill for a family in povery from a $2,968 credit to a $3,910 liability. This is $6,878 less that a family already IN POVERTY would have every year if Cain's plan becomes the law of the land.
Say Amen to that, you fucking asshole
(*an earlier version of these calculations used a wrong poverty threshold, which was taken from Herman Cain's website (.pdf, table 6). Serves me right for taking numbers from a source I spend the entire post attempting to rip to shreds.)
Cain: Today, under the current system, they will pay over $10,000 in taxes,
assuming standard deductions and standard exemptions. I've gone through the math. $10,000
Cain: Now, with 9-9-9, they're going to pay that 9% personal, that
9% tax on income, so that's only $4,500. You still have $5,500 left
over to apply to the sales tax piece.
Thursday, October 20, 2011
-Let's consider a family of four making $50,000 a year, which is pretty close to the median household income.
-Their employer must pay 6.2% of that amount in Social Security taxes and 1.45% in Medicare taxes (source), meaning that their employer really spends $53,825 to employ that person.
-Of that $50,000, the family must also pay 6.2% toward Social Security and 1.45% toward Medicare, dropping their total to $46,175.
-They must also pay income taxes. This first involves figuring out their taxable income, which depends on several factors:
Total Gross Income: $50,000
Standard Deduction in 2010 for a married couple is $11,400
So their taxable income is now $38,600
They also can claim a Personal Exemption of $3,650 per family member. $3,650 x 4 = $14,600
This drops their taxable income to $24,000
For couples filing jointly, the tax tables (massive .pdf, relevant bit on page 77) work out to a total liability of $2,766
But the family of four would get two $1,000 child credits, dropping their bill to $766
-So their take-home after payroll taxes, $46,175, minus $766 in income taxes, makes their total post-tax income $45,409.
-Their total tax bill is $4,591
-If you want to count the employer's portion of payroll taxes, which I think is totally legitimate and indeed preferred, as if there were no taxes the employer would be happy to give that cash to the family, their bill is $8,416
As shown in Table 10c of this pdf, the actual tax rate under the 9-9-9 plan would actually be 9.1%. 9's more catchy, but we'll do the calculations with the actual number of 9.1%.
Now, under Cain's plan, let's assume that same employer still wants to spend a total $53,825 to employ the employee. What will be the family's total after-tax income under Cain's plan?
-Payroll taxes go away under 9-9-9. But, employee wages/salaries, which are currently tax-deductible, are no longer so under Cain's plan. This means that the employer has to pay taxes equal to 9% of your wages before they can give the rest to you. So 0.091 x $53,825 = $4,898 is how much they pay in taxes before they give you your salary.
-The family's gross pay is thus $53,825-$4,898 = $48,927
-While Cain hasn't discussed it on the campaign trail, his calculations (.pdf, Table 6) allow for a deduction equal to the poverty rate. For our family of 4, this means they can claim a deduction of $15,006
-Their total taxable income is therefore $48,927 - $15,006 = $33,921
-Paying 9.1% of that in income taxes takes out $3,087
-Their total take-home, after corporate and income taxes but before sales taxes, is $48,927-$3087 = $45,840
-Based on the Bureau of Labor Statistics Consumer Expenditures Survey, a household with that after-tax income would be expected to spend about $41,000 each year.
-With the proposed sales tax, our family would have to pay a 9.1% sales tax on purchases. This would mean an additional $3,420 in taxes ($37,580 in spending plus 9.1% of that amount equals $41,000)
Got all that? Great, we're almost to the end!
Total tax bill under 9-9-9 = $3,087 (income tax) + $3,420 (sales tax) = $6,507
Including the employer's portion = $6,507 + $4,898 = $11,405
Currently, the family would pay $4,591 in federal taxes. Under 9-9-9, it goes up to $6,507, for an increase of $1,916. Counting the employer's contribution, which I think is really the more valid comparison, the family's tax bill increases from $8,416 to $11,405, an increase of $2,989.
For families who currently make less than $50,000, the change is proportionally worse, as they pay an even lower rate under current law, thanks to other deductions and credits like the Earned Income Tax Credit, all of which go away under 9-9-9.
As Cain points out, the plan is intended to be revenue-neutral (i.e., raises the same amount of taxes in total as the current system). So, if the average family and poorer families are paying more, that means the rich will pay less. A lot less. We'll look at just how much less in Part 2.
See what I mean about Cain being a fucking asshole?
Monday, October 17, 2011
-Boycott the bad guys.
-Buy local and buy small. Mom and Pop's shop doesn't put them in the 1%. If you don't want CEOs to make 500 times what their employees make, don't buy from big companies. If a privately-owned company, such as Koch Industries, won't tell you what their executives/owners make, don't buy from them. Same thing for environmental protections, providing health insurance to their employees, or whatever else is important to you.
-Ignore political ads. The only reason political donations matter is that people allow biased (i.e., sponsored) media to influence their vote. If the 99% ignored ads, Karl Rove and the Koch Brothers could spend all the money they wanted and it wouldn't make much difference in the outcome of elections, so then politicians wouldn't feel like they owed their rich sponsors anything. Other forms of electioneering (voter canvassing, mailers, etc.) would still have a role, but these aren't nearly as effective or expensive as TV ads.
-Ignore ads in general. While you're at it, ignore all ads. If a company's big enough to buy an ad on a national network, it's probably big enough to hideously overpay its management.
We have more money than them. We have more votes than them. They can only maintain the current system by keeping us from using our power. Political protest is one way to fight back, but it's not the most direct or the most effective.
Wednesday, October 12, 2011
The truly fascinating and important result come from comparing the new NBC poll with the previous one, conducted at the end of August. At that point, Rick Perry was in the lead with 38%, followed by Romney with 23%. Cain was tied for 5th at 5%. In the new poll, Perry's support has fallen to 16%, Romney is stuck at 23%, and Cain surged to 27%. His 22% rise perfectly mirrors Perry's 22% fall. Essentially, a fifth of the electorate decided to switch horses, and, statistically speaking, none of them decided to switch to Romney!
This is yet more support for the idea that most Republican voters just don't want to vote for the most electable (i.e., least conservative) of the major candidates. Romney's path to the nomination is to keep as many conservative candidates in the race to split the anti-Romney vote, allowing his 20-some percent to carry the day. Once he racks up wins in Iowa, New Hampshire and Nevada, he'll ride the inevitability/electability wave to the nomination. If 2 or 3 out of Perry/Cain/Bachmann/Gingrich drop out of the race before Iowa, one of the survivors might be strong enough to overcome Romney. But if everyone stays in and stays relatively even, Romney will cruise to the nomination.
This dynamic helps explain Romney's approach in last night's debate to Michele Bachmann. A feature of the debate was that each candidate was allowed to ask one question to another candidate. Most used this as an opportunity to try to nail Romney. When it was Romney's turn, he chose to lob a softball to Bachmann, who launched into an excerpt from her standard stump speech. Romney needs Bachmann, the weakest of the 2nd tier candidates, to stay competitive to draw support from other conservatives, so he used his question to help her out.
It will be very interesting in the weeks before Iowa (less than 3 months away) to see if there's pressure on conservative candidates to get out of the race. We know Ron Paul's in it til the convention, but will any of the others bow out to keep the more-moderate Romney from being the nominee?
Tuesday, October 11, 2011
-Rep. Bachmann repeated the standard Republican claim that the federal government is responsible for all those bad loans. Banks were forced, so the line goes, by the government to give $500,000 loans to janitors. This is, of course, pure bullshit. Looking at how hard it was to pass Dodd-Frank, which is a very weak regulatory structure for banks, it is ridiculous to claim that the poor, oppressed banks were forced to give all those subprime loans.
-Bachmann also repeated the bullshit that increasing the debt limit gave Obama a "blank check". The President can't spend a nickel without Congress's specific say-so. It's not a blank check for Obama; it's a check that Congress had already written and signed.
-Much of the debate centered around Herman Cain's 9-9-9 plan. Bachmann chose the line of attack that, by adding a whole new kind of federal tax (a 9% sales tax), Cain would open the door to the sales tax being increased in the future. Cain is prevented from using the best defense to this claim, which is that neither Democrats nor Republicans would ever increase a sales tax. Republicans wouldn't raise a tax, period, and Democrats would never raise a strongly regressive tax. Using this line of defense would highlight the regressive nature of sales taxes, so Cain can't use it.
-Cain continues to demonstrate a lack of understanding about how laws work, as previously discussed here. He wants to include in his 9-9-9 bill a requirement for a 2/3 vote by the Senate to raise taxes. Because one act of Congress cannot bind another, a future Congress could just come along and say "Fuck that 2/3 thing", and vote a tax increase with a simple majority.
-Cain continued the tactic of portraying the participants in the Occupy Wall Street movement as being distinct from "real Americans". He claimed his recent remarks that those who aren't rich only have themselves to blame were only directed at OWS, not at the 14 million who are unemployed through no fault of their own. It is a false distinction aimed at marginalizing the OWS protesters.
-Rep. Paul rightly laid the smackdown on Cain after Cain claimed Alan Greenspan was the best Fed chair of the past 40 years. Greenspan's Fed bear much of the blame for inflating the housing bubble.
-Gov. Perry ignored a question about why the income gap is growing so much, choosing instead to launch a non-specific attack on Obama. It's not surprising that he avoided the question, as there is no answer a supply-sider can give to the question. Ron Paul could have pointed to crony capitalism as a cause, but none of the other candidates has an answer.
-Perry needed to land some punches on Romney to revive his campaign, and he wasn't able to do it. But he also didn't "throw up on himself" as he did in the previous debate.
-Romney had a good night. The format of sitting around a table together made for a more cordial, less-attacking debate, which benefits the guy with the biggest target on his back. I think Romney would be fine with everyone spooning throughout the next debate.
Even with all the gains made by the 1% in the past 30 years, they only make about 20% of the total reported income. Unless you're Rolls Royce, your company depends on customers from the 99%. A customer base making purchasing decisions based on corporate behavior is a much bigger threat to the 1% than marching in the street begging politicians to help you.
With their power to obliterate brands and companies, motivated consumers can force changes in how the 1% treats the 99%. Koch Industries paid $21 billion a few years back for Georgia-Pacific, the company that makes Brawny paper towels, along with Dixie cups, Quilted Northern toilet paper, and many other products. The threat of zeroing out that investment would go a long way toward stopping the Kochs' campaign to blame all the ills of society on teachers making fifty grand a year.
Libertarians/conservatives argue against government regulations by advocating for the free market. This approach depends on informed consumers making rational decisions based on their personal values. We can depend on government to fulfill this role for us, but in the post-Citizens United world of one dollar/one vote, it's unwise to count on politicains to do this for us. Fortunately, we don't need them. We're powerful enough to do it ourselves. We are the 99%.
Wednesday, October 5, 2011
As you might expect, the clear champion amongst the petitions in terms of number of signers concerns the end of marijuana prohibition. The second-most popular petition advocates the forgiveness of all student loan debt in order to put money in people's pockets and stimulate the economy. As a holder of significant loan debt, I would greatly benefit personally were this to be done. However, it is terrible fiscal/economic policy.
While most college graduates have taken a hit in the past few years, they are still doing better than non-grads. Most immediately, that should disqualify them from being a preferred group to receive government benefits, as there are people (some of whom are themselves college graduates, to be fair) who are struggling for the essentials of living. In terms of stimulus, forgiving student loan debt is an inefficient use of government resources because college grads are less likely than their poorer counterparts to spend any money they have and stimulate the economy. People who already can afford the essentials might save some of the windfall from the government, but those in poverty will spend it.
Student loan forgiveness is a waste of government resources, giving benefits to people who are less likely to need them and less likely to use them to stimulate the economy. It's better to give money to the janitor than the secretary. Of course, either is better than giving money to the boss, which is the Republicans' plan.
Tuesday, October 4, 2011
The other big news this morning is an ABC/Washington Post national Republican poll which confirms the findings of the previous poll, by Fox. The relevant bits are:
-Rick Perry's taken a big hit, losing over a third of his support, dropping from 28% to 17-19%.
-Despite the wide fluctiations in the support of Perry and others, Romney continues to chug along in the low to mid twenties, lending further support to our recent discussion of his position. He has now passed Perry in the polls, according to the rolling average of polls compiled by realclearpolitics.com
-Herman Cain is the new flavor of the month, picking up just about all the voters Perry lost. He is tied with Perry in 2nd place in hte new poll.
Cain's strength means it's time to revisit his candidacy. His shortcomings in foreign policy were discussed previously. As a successful businessman and former chairman of the board of directors of the Kansas City Fed, he has significant and politically-attractive economics/business experience. He also has mastered stating his positions with an upbeat tone that stands out at debates.
His main policy proposal is his 9-9-9 plan, which would scrap all federal taxes and replace them with a 9% flat corporate tax, a 9% flat income tax, and a 9% national sales tax. Cain has not released, so far as I'm aware, a detailed analysis of his plan. Here's an analysis that shows, as one might expect with a flat tax structure, that the taxes for the poor would go way up and the taxes for the rich would go way down. By eliminating capital gains taxes, an estimated 23,000 millionaires would pay no taxes on their income at all. In total, the plan would bring in roughly $300 billion less than the current plan, which would require more debt.
But, Herman Cain is not, at least at this point, a serious or viable candidate for President. On a superficial level, he appears to be more interested in building his name and selling books than winning the nomination. His list of upcoming events includes nothing in Iowa and New Hampshire, instead holding events in later-voting states like Texas, Virginia, Ohio and Arizona. He's taking 2 weeks away from campaigning to sell his book. He also has very little campaign infrastructure in place (pollsters, Iowa caucus captains, etc.), though with the increased attention/donations, he might be able to build a real campaign.
More generally, his complete lack of experience in government will be a damning liability. This past weekend, he appeared on Fox News Sunday. He was asked whether, by adding a new kind of tax (federal sales tax), would he make it easier for the government to tax more. He said "In the legislation that I am going to ask Congress to send me, I want a two-thirds vote required by the Senate in order for them to change it. That will impede cavalierly raising it." The problem is that the legislation would be clearly unconstitutional. One piece of legislation cannot bind another. Cain and his advisors appear to be unaware of this fact.
Cain also has practiced the Republican pastime of lying about health care reform. In a recent debate, he claimed that he would not have survived cancer a few years back had Obamacare been in place. He stated that his care would have required a federal bureaucrat's approval. This claim was determined by Politifact to be "False".
Herman Cain, while not a serious candidate, is attracting significant conservative anti-Romney support. He will have to decide whether he wants to profit from this support by selling books (the Huckabee route) or actually try to be elected President. Given his significant weaknesses as a candidate and complete lack of government experience, he might be better off to try the former.
Monday, October 3, 2011
So now we have a "radical socialist anti-colonial" who as President has:
-advocated changes to the tax code that Reagan also proposed,
-passed a similar health plan to ones supported by Mitt Romney, mid-90's Senate Republicans, and leaders at the conservative Heritage Foundation, while refusing to fight for a public option or single payer,
-passed a stimulus bill that was too small and largely constituted of tax cuts,
-expanded gun rights, earning an F from the anti-gun Brady Campaign,
-extended the Bush tax cuts for the wealthy,
-kept Gitmo open, continued drone attacks and generally continued Bush's foreign policy.
You can agree or disagree with Obama's policies, but to call his Presidency anything other than centrist, or even conservative, is so laughable I couldn't take seriously anyone who would make the claim.
The polling data pretty much supports this view. Despite big shake-ups to the race (Huckabee dropping out, the rise and fall of Trump and Bachmann (and Perry?), the rise of Herman Cain), Romney's support in polls has been pretty steady in the high-teens to mid-twenties.
His support is high enough to dominate a field of candidates who split the conservative votes among themselves. The goal of all the other candidates is to consolidate the anti-Romney vote behind him-/herself, climbing above Romney's steady but beatable support. Romney wins by keeping the field closely competitive with each other, allowing his more moderate voter base to carry him to victory. He is greatly helped by additional conservatives in the race; Sarah Palin entering the race would probably deliver Romney the nomination. She would pull enough conservatives from Bachmann and Perry in Iowa that Romney would likely win there. Following that up with a win in New Hampshire, where he absolutely dominates the polls, would pretty much end the race. In the past 9 election cycles, which more or less define the modern primary era, no Republican has won the nomination without winning either Iowa or New Hampshire, and wins there would coalesce support behind him as the most electable candidate. There would be immense pressure from anti-Romney conservatives on weaker conservative candidates to get out of the race before Iowa to keep that from happening.
However, the emergence of another moderate candidate, such as NJ Gov. Chris Christie, or the ascension to viability of former Utah Gov. Jon Huntsman, would likely devastate Romney's campaign. If either is able to peel 5-10% from Romney's total, he sinks from frontrunner to also-ran.
Christie will reportedly announce his decision in the next few days. We'll know a lot more about the shape of the Republican race, and Mitt Romney's chances, when he does.
Monday, September 26, 2011
It would seem that raising taxes on the wealthy is the sort of thing that would only appeal to pinko-liberal commies like me, and that by advocating tax increases for the rich, Obama is abandoning his long record of compromise and seeking the center (working with Republicans to cut spending, pushing for "grand bargain" with Boehner, not advocating a public option, agreeing to extend Bush's tax cuts, etc).
However, this is clearly not the case, based on recent polling (New York Times (.pdf), Washington Post, NBC/Wall Street Journal (.pdf), Gallup). Depending on how the question is asked, between 54% and 80% of moderates and independents favor these tax increases.
Obama's electoral strategy, as previously discussed, will likely depend on portraying himself as the "adult in the room" trying to govern the nation while Republicans refuse to compromise. Republicans would be helped by stories of Obama playing to his base. But the numbers show that's not what he's doing.
I think a Romney nomination would be a gift to Obama's re-election bid, as Romney fits right into Obama's previously-discussed strategy of showing the Republicans will attack the things they used to support, leaving the government gridlocked and incapable of doing anything. On issue after issue, Mitt Romney has lurched significantly to the right, as has the rest of his party.
In 1994, when he ran for Senate against Ted Kennedy, Romney said he would support Sen. John Chafee's (R-RI) health care bill, which included a federal mandate to buy health insurance. He later, as Governor, put in place "RomneyCare", which includes a mandate to provide insurance.
This election, he attacks health care reform as strongly as any of his Republican colleagues. With Republican voters whipped into a frenzy over ObamaCare, to do anything else would end his chances of nomination.
In 2005, Romney was strongly involved with negotiations to set up the Regional Greenhouse Gas Initiative, a cap-and-trade system among New England states. Initially, he supported the measure, saying "I think it is good business" and "we can effectively create incentives to help stimulate a sector of the economy and at the same time not kill jobs."
When running for the Senate in 1994, Romney stated "I believe that abortion should be safe and legal in this country." When running for Governor in 2002, he said "I will preserve and protect a woman's right to choose, and am devoted and dedicated to honoring my word in that regard."
In 2008 and 2012, he has repeatedly said he is pro-life and would support overturning Roe v Wade.
In 1994, Romney advocated strict campaign spending limits and the abolition of PACs. In 2002, he suggested public financing of campaigns through a 10% tax on private contributions to privately-funded candidates.
In 2008, he said "Do we really want government telling us when we can engage in political speech, and what form it can take". He has since been strongly opposed to McCain-Feingold and other efforts to limit campaign contributions and spending. Recently, he has received rather shady large contributions from corporations which form, give him a check for lots of money, then close.
In 1994, Romney wrote a letter (.pdf) to Log Cabin Republicans saying he supported gay and lesbian soldiers being allowed serve openly.
He recently said "Don't Ask, Don't Tell" should have been kept in place.
In the interest of brevity, I'll stop there, but he has a similar record of strong right-ward turns on issues such as gun control, immigration policy/amnesty, capital gains taxes and others.
Vast majorities of voters agree that Washington is broken. Parties that used to be able to compromise with each other are now unable to do so. A Mitt Romney nomination would be great news for Obama and Democrats because he personifies the truth that the separation between the parties is the result of the Republican Party tilting heavily to the right.
Next up, we'll get back to discussing why Obama's recent strategy of pushing for tax increases on the rich is not "playing to his base", as his critics claim.
Upon entering the race, he shot to the top of the polls. Unfortunately for him, his position invited lots of scrutiny and attacks, and multiple cracks have shown. His main strength, his jobs record, has been shown to be largely a mirage, with a study showing that 81% of the jobs created in Texas going to immigrants, which doesn't play well with Republican voters. Many of the jobs created were also government jobs. Others were poachedfrom other states, making his model difficiult to apply nationwide.
More generally, he's shown himself to be, well, kind of dumb. His debate performance have hurt his campaign rather significantly, particularly his debacle in last Thursday's debate. A video of an answer about abstinence-only education emerged that showed his complete inability to articulate a position or use facts to support his argument. He defended his policy of giving in-state tuition rates to children of illegal immigrants by saying those who don't support it "don't have a heart." Not exactly a good way to get votes in a GOP primary.
It's particularly unfortunate for him that he doesn't have great rhetorical skills, with the number of questionable positions he has to defend. In his book "Fed Up", he called Social Security unconstitutional and ""a crumbling monument to the failure of the New Deal." He now says he wants to reform the program but hasn't really addressed the "unconstitutional" attack. Given how popular it is, particularly with older people (who tend to vote more), he needs to come up with a better answer.
He has also taken a lot of heat for issuing an executive order requiring girls to get the HPV vaccine, making Texas the first state to require it. While the HPV vaccine is a great thing that I personally think each and every girl should get, there was some appearence of "crony capitalism" in how the order came about. Perry's former chief of staff was a lobbying for the vaccine's maker, Merck. Perry also received about $29,500 from Merck since 2000. Merck has also donated $352,500 to the Republican Governors Association since Perry became active in that organization in 2006.
And he let his state murder a guy and has since been covering it up.
In sum, Perry is Bush circa 2000 but with a worse record as governor and more controversial positions to have to defend. Bush wasn't a great orator, but he didn't really have all that much as governor to answer for. Unless Perry starts showing more skill on the campaign trail, Romney's looking pretty good for the nomination. More on him next post.
Wednesday, September 21, 2011
Unfortunately, they seem to be unable to apply the same logic to teachers, firemen and police officers. By stripping union rights from these groups, and generally opposing efforts by the Obama Administration to use federal funds to keep them from being fired, Republicans are dis-incentivizing workers who provide these vital services. Just as the economy would be damaged by having fewer "job creators", it will also be weakened by having fewer good teachers.
In determining how to close the deficit, we must, through our democracy, decide how much each of us will contribute in addition to what we already do. Republicans want to exempt a segment of society from contributing, despite their being the segment most able to afford it.
In my next post, we'll discuss the ridiculousness of calling Obama's tax policy "playing to his base" and "giving up on compromise".
Tuesday, September 20, 2011
She apparently thinks HPV vaccines cause mental retardation, on the basis of one anectdotal report from the campaign trail. That she could be so easily convinced shows her lack of scientific insight and knowledge. That she would pass along the claim in a national interview shows her lack of political instincts. This episode, along with a long history of misstatements and/or fabrications, as well as having never in her 4+ years in Congress written a single bill that has become law, shows that she just doesn't have the intelligence or ability to be President.
But there is a path for her to win her party's nomination, which in this economic and political environment, gives her a path to the White House. Her campaign was doing very well, including a win in the Iowa Straw Poll, until Gov. Rick Perry entered the race. He has taken over much of her support as the Tea Party "anti-Romney". It is unlikely that Bachmann will win the nomination unless Perry is knocked out of the race.
Bachmann seems to recognize this, given the vigor with which she attacked him at the last debate. Her attacks regarding Perry's decision to mandate the HPV vaccine in Texas, along with pointing out possible corruption on Perry's part (more on that in my post about him) have managed to hurt Perry somewhat, particularly in the head-to-head with Obama.
Hopefully, even if Bachmann were nominated, the months of scrutiny of her record and her abilities would prevent her from being elected. But one can never be too sure.
Monday, September 19, 2011
The case is best summarized in this New Yorker article. Being a New Yorker article, it's fairly lengthy, but I think it's worth it, particularly with Perry being the GOP frontrunner.
If not, the basic summary is that he was convicted of setting a fire in 1991 which killed his 1 year old twins and 2 year old daughter. The main evidence against him were patterns in the burned house which suggested "puddles" of accelerant (e.g., lighter fluid), as well as marks that indicated more than one source point for the fire. These analyses of the burn patterns is not based on any science, and instead were based on practices handed down from generation to generation of fire investigators. A psychiatri st who pretty much made his living "diagnosing" murder suspects as sociopaths, and who has since been expelled from the American Psychiatric Association, labelled Willingham as such based on an Iron Maiden poster in his house. He was convicted and sentenced to death, despite there being no motive given besides his supposed mental illness, and no evidence besides the non-scientific analysis of the burn patterns.
Just before Willingham was executed, his case was reviewed by Dr. Gerald Hurst, a fire investigator who actually (gasp!) uses scientific methods. He reported on the advances in fire investigation since the 1991 fire. It had since been discovered that accidental fires can form the same patterns (puddles, apparent multiple starting points) as those found in the Willingham house. He gave his report to Perry's office and the clemency board. Internal e-mails show no evidence that anyone in the Governor's office or on the board even read Hurst's report. He was executed (or, if you prefer, murdered) by Texas on February 17, 2004.
Since his death, there was a state panel set up to investigate the use of forensic investigation in Texas. The panel hired another fire investigator to look at how arson cases were investigated in Texas, and he came to similar conclusions as Hurst. Just days before the panel was set to publish its conclusions, Perry removed several of its members and appointed an ally to run the panel. Since then, the panel has assigned the Willingham case to a sub-committee, which allows its hearings to be closed to the public. They have also moved their full meetings to obscure, hard-to-reach areas of the state to discourage reporters from attending.
Rick Perry is the frontrunner in his party's race for the White House. His record, policies and personality have been the focus of the last couple Republican debates. He talks proudly on the campaign trail of the use of executions in his state; he has presided over 235 executions, including Willingham's, in his time in office. If it is true that his state executed an innocent man on his watch, that should disqualify him in the eyes of voters. Hopefully the moderator at an upcoming debate, or anywhere else during the campaign, will have the guts to ask him about it.
Friday, September 16, 2011
They talk about completely overhauling the tax while claiming, as Boehner did in his speech, that the big reason employers aren't hiring is "uncertainty" about their future taxes. So their plan to turn around the economy is to put every single line of the tax code on the table, endangering every subsidy, loophole and incentive that every business in America depends on to keep their doors open. Sounds like their plan would cause a lot more uncertainty for job creators.
It would be one thing if they thought they'd be able to do this quickly. But, given the current environment, heading into an election year, there's no chance it would be a fast process. And every lobbyist in town would prepare to fight tooth-and-nail against any elimination of their specific loophole.
Meanwhile, nothing would be done to help the economy in the short term. So we'll still be stuck with high unemployment even longer, with the Republicans not only standing in the way, but actually making things worse, according to their own rhetoric.
Tuesday, September 13, 2011
It is utterly indefensible of Blitzer to not include Paul in the Fed discussion. Mitt Romney had even set up Paul's response by saying "We need to have a Fed... because if we don't have a Fed, who's gonna run the currency? Congress?! I'm not in favor of that." Had Blitzer then gone to Paul, I'm sure that he would have quoted Article 1, Section 8 of the Constitution, which says that Congress has the power "To coin Money, [and] regulate the Value thereof".
This is just one more example of the media's anti-Paul bias, which I think is due to his being the most anti-corporate candidate in the race. Despite having solid backing among Republican primary voters and his close second-place finish at the Iowa straw poll, he is marginalized as a non-contender. Doing so elevates the ideas and policies of dunces like Rick Perry and Michele Bachmann to the center of these debates, instead of the more interesting (but ultimately wrong) ideas of Paul.
He favors a gold standard, which would fix the value of the dollar to the value of gold. The US was on the gold standard until 1971, when it was ended by Richard Nixon. Returning to the gold standard today, as well as going to a full-reserve banking system that Paul and other Austrians support, would cause massive deflation. By limiting the supply of dollars and requiring banks to hold more of them in reserve, the value of the dollar will increase significantly. For people (like me) with student loans, or a 30 year mortgage, or any other debt, which becomes harder to pay back when each dollar is more valuable, a Ron Paul presidency would be a disaster.
It wouldn't only be a disaster for debtors. As discussed in a previous post, much of the reason for the current poor state of the economy is due to less consumer spending, as people are saving more to make up for the lost value of their homes. Deflation, by making people's mortgages and other debts larger in real terms, would have a similar effect, further driving down consumer spending and worsening the economy.
I've previously discussed the refusal of some to accept that there are some spheres, such as limiting health care costs, where government programs might be better than the private market. Paul has never met a government program he wouldn't cut/eliminate. He has such a limited view of federal power that he opposes mandates in the Civil Rights Act of 1964 that desegregated restaurants/hotels/etc.
While Ron Paul's ideas are frequently wrong and/or harmful, he has enough support that his ideas deserve more attention than they're getting. Hopefully in future debates and media coverage, he'll have more of a chance to share his ideas, rather than the media deciding which ideas merit consideration.
Monday, September 12, 2011
Also, apologies to Fred Karger (gay rights activist), Buddy Roemer (former Louisiana Gov. and Congressman who lost to former KKK leader David Duke in 1991 before disappearing for over a decade), and Gary Johnson (libertarian former New Mexico governor), who are so far behind that they can't get into the debates.
Herman Cain, former CEO of Godfather's Pizza
Herman Cain is running the campaign Donald Trump wishes he could have run. Cain has never been elected to anything, but he's had a good run in this field, with his support reaching double digits after a well-received debate performance in South Carolina back in May. He has since faded, but still maintains enough support to stay in the debates.
My impression from watching him in debates is that he excels at telling Republican voters what they want to hear, even if he doesn't have much of an idea what it means. After making several statements about the Israel-Palestine conflict a few months back, it became clear that he had no idea what the Palestinian "Right of Return" is. Being a rather important issue in the conflict, that was the moment that I wrote off his chances of being a serious contender.
Newt Gingrich, former Speaker of the House
Despite leading the Republican war against the Clintons in the 90's, Gingrich also demonstrated an ability to work with President Clinton on big initiatives such as welfare reform. In 2005, he had high-profile discussions with then-Sen. Hillary Clinton about health care reform. It is this willingness to work with Democrats that made Newt my preferred candidate (though in this field, that's not saying much).
Unfortunately for Newt, his campaign had one of the worst rollouts in recent history. He appeared on Meet the Press and denounced the Republican/Paul Ryan budget as "right-wing social engineering". He picked a bad year to fight the new Republican/Tea Party orthodoxy. He was forced to quickly walk back his statement, and his candidacy has never recovered.
Jon Huntsman, former Utah Governor
I am flabbergasted that Jon Huntsman is doing so much worse than Mitt Romney. Both are handsome, Mormon, rich, moderate former governors. Huntsman has a better record creating jobs in his state than Romney did in his, as Huntsman and Perry pointed out in last week's debate. Most importantly, Huntsman does not have the "RomneyCare" baggage that should be poisoning Romney's chances among Republican primary voters.
In the recent debate, he denounced those of his competitors (read, Perry and Bachmann) who have led to his Party being viewed as "anti-science". While accepting the role science should play in a modern society might help him in a general election, it will make it very difficult to emerge from a Republican primary.
Rick Santorum, former Pennsylvania Senator
Santorum's appeal is pretty much limited to social conservatives who don't like the Tea Party, or at least those who don't like Bachmann and Perry. He's militantly anti-gay and anti-abortion. He was also defeated, as an incumbent, by 19% in his re-election bid in 2006.
Sunday, September 11, 2011
The recession was caused by the breaking of the housing bubble. Housing prices dropped by about a third. This had a particularly strong effect on consumers because many of them had a large percentage of their net worth tied up in their homes. As a result, the average Americans' net worth fell by almost 25% during the recession. To make up for this shock, and given the uncertainty in the labor market, many Americans have started saving instead of spending. Given that consumer spending makes up about 70% of the economy, that's a recipe for a recession and a slow recovery.
It's also a recipe for making Republicans' plans for across-the-board tax cuts ineffective. Untargeted tax cuts are likely to be saved, particularly those tax cuts given to top earners, adding to the piles of cash banks are already sitting on. Money saved is not as stimulative as money spent, as we need people buying things to mkae up for the drop in consumer spending. Untargeted tax cuts might also be used to buy things from overseas.
Republicans are also pushing for corporate tax cuts. Corporate income taxes in America already add up to a smaller total, as a percentage of GDP, than corporate income taxes in any other OECD country. Corporations are sitting on a record amount of cash. Corporate profits are at an all-time high. I have yet to see any convincing evidence that jobs will come if we just give corporations just a little bit more, but that's what Republican candidates are proposing.
Obama's preference in the American Jobs Act for targeted tax cuts, including payroll tax cuts and tax credits for hiring veterans and long-term unemployed, ensures that any lost government revenue is spent specifically on the best solution, American jobs. Instead of giving tax cuts to people who may or may not use it to add jobs, Obama's plans will only give tax cuts to job creators. And instead of labelling every rich guy and job-cutting corporation a "job creator" as the Republicans do, the only way to get tax benefits is to actually create jobs.
Saturday, September 10, 2011
-Prior to the recent debt ceiling fight, the debt ceiling had been raised 74 times since 1962 without controversy and without conditions. The vast majority of current Republican who were in Congress during the Bush administration voted for increases each of the 7 times it was increased. These Republicans now decided that trillions in cuts must be attached to the recent increase.
-7 Republican Senators (Robert Bennett of Utah, Sam Brownback of Kansas, Mike Crapo of Idaho, John Ensign of Nevada, Kay Bailey Hutchison of Texas, James Inhofe of Oklahoma, and John McCain of Arizona) co-sponsored a bill to set up a deficit commission which Congress would be forced to vote on. After Obama came out in support of the bill, all 7 removed their names from the bill and voted against it. As a result, we got a weaker commission without a binding requirement for a vote.
-During the health care reform debate, Republicans stated they wanted 4 things in the bill:
1. Allow people to buy insurance across state lines. This is in Obama's law.
2. Allow individuals and small businesses to pool together to buy insurance. This is what the health insurance exchanges established by Obama's law are.
3. Allow states flexibility to experiment with different approaches. This is in Obama's law, which allows states to opt out if they have a better proposal.
4. Tort reform. No particularly strong elements of this in the bill, though it hasn't particularly been shown to work when it comes to limiting health care costs.
Despite including these elements in the law, as well as support from such noted Socialists as Bob Dole and Obama's refusal to push for a public (government-run) option, Republicans uniformly voted against it and decry reform as an affront to all that is right and American.
Why are Republicans acting this way? Why do they demonize proposals which they used to support, just because Obama supports them? Why do they refuse to compromise with him, rejecting deals like Obama's "Grand Bargain" which included between $3 and $5 in spending cuts for every dollar of tax increases?
Republican Senate Minority Leader summarized the Republicans' position very succinctly when he said "the single most important thing we want to achieve is for President Obama to be a one-term President." He didn't say their number one goal is to put Americans back to work, or let them keep more money in their pockets, or anything else not hyper-partisan. Their goal is to make Obama fail, and simple game theory demonstrates that this can't happen by giving him anything he wants.
There are two possible scenarios come Election time; either the economy improves, or it doesn't. If it improves, history tells us that Obama would be more likely (though not a lock) to be re-elected, whether he had some Republican support or not. If it doesn't improve and Republicans had supported some of Obama's initiatives, Obama would be able to share the blame with them, much as Bush stuck John Kerry and the Democrats with some blame for Iraq during the '04 election. If it doesn't improve and Republicans voted against him all the way, he gets all the blame and is an easy target come 2012.
So, given that their stated #1 goal is to make him a one term President, it makes sense that they would deny everything to Obama. There is even motivation for them to actively prevent the economy from improving. Given their refusal to support previously non-controversial things like raising the debt ceiling and infrastructure spending, there's reason to think that's what they're doing.
Thursday, September 8, 2011
In 2003, when Medicare Part D was passed, it was projected that 93% of eligible seniors would sign up for the program. In fact, only 77% of those eligible enrolled. Additionally, overall drug spending, not just spending within Part D, came in 35% below the projections made in 2003. This is due to several drugs becoming available generically, fewer new expensive drugs, and the rise in the number of prescriptions per senior not rising as quickly as projected. Most if not all of the "savings" Ryan points to come from factors which have nothing to do with the private nature of the plans.
Looking at Medicare since implemented, it has consistently shown a superior ability to control costs than private health insurance plans. As shown in the National Health Expenditures Data (.pdf, page 17, Table 14), between 1970 and 2009, the per-enrolee expenditures for Medicare have increased at an annual rate of 8.3%, compared to 9.3% for private health insurers. Since 1999, the annual advantage for medicare has been larger, between 2 and 2.5% per year. Thanks to the miracle of compound interest, it works out to private costs increasing over 60% faster than Medicare over the past decade (my calculation based on the percentages in the .pdf above).
Per the CBO, a Medicare plan for a senior is 11% cheaper today than providing the same benefits would cost if purchased from a private insurer. This is largely due to the massive bargaining power that Medicare has, given the huge number of people it covers. The CBO projects, based on the different rates of growth like I discussed in the previous paragraph, that by 2030, a Medicare plan would cost 30-40% less than a private plan.
Rep. Ryan's plan proposes a subsidy for private insurance that, in 2030, would be worth about 32% of the cost of a private plan, per the CBO. Given that a Medicare plan would be cheaper by just about that same amount, seniors would be better off if the government kept Medicare going but completely eliminated the subsidies than they would be with being forced into a subsidized private plan.
Ryan and other Republicans are incapable of recognizing the errors in their approach to Medicare because it is antithetical to their free-market dogma to think that a government program could be more efficient than a privatized system. We have 40 years of Medicare history that clearly demonstrates that they are wrong.