Tag: New York Times

Democrats Agree on Health Plan Outline: Be Afraid, Be Very Afraid

By
Michael D. Tanner

The New York Times reports that key congressional Democrats have agreed on the basic provisions for a health care reform bill.  And while many details remain to be negotiated, the broad outline provides a dog’s breakfast of bad ideas that will lead to higher taxes, fewer choices, and poorer quality care.

Among the items that are expected to be included in the final bill:

  • An Individual Mandate. Every American will be required to buy an insurance policy that meets certain government requirements.  Even individuals who are currently insured – and happy with their insurance – will have to switch to insurance that meets the government’s definition of acceptable insurance, even if that insurance is more expensive or contains benefits that they do not want or need.  Get ready for the lobbying frenzy as every special interest group in Washington, both providers and disease constituencies, demand to be included.
  • An Employer Mandate. At a time of rising unemployment, the government will raise the cost of hiring workers by requiring all employers to provide health insurance to their workers or pay a fee (tax) to subsidize government coverage.
  • A Government-Run Plan, competing with private insurance.  Because such a plan is subsidized by taxpayers, it will have an unfair advantage, allowing it to squeeze out private insurance.  In addition, because government insurance plans traditionally under-reimburse providers, such costs are shifted to private insurance plans, driving up their premiums and making them even less competitive. The actuarial firm Lewin Associates estimates that, depending on how premiums, benefits, reimbursement rates, and subsidies were structured, as many as 118.5 million would shift from private to public coverage.   That would mean a nearly 60 percent reduction in the number of Americans with private insurance.  It is unlikely that any significant private insurance market could continue to exist under such circumstances, putting us on the road to a single-payer system.
  • Massive New Subsidies. This includes not just subsidies to help low-income people buy insurance, but expansions of government programs such as Medicaid and Medicare.
  • Government Playing Doctor.   Democrats agree that one goal of their reform plan is to push for “less use of aggressive treatments that raise costs but do not result in better outcomes.”  While no mechanism has yet been spelled out, it seems likely that the plan will use government-sponsored comparative effectiveness research to impose cost-effectiveness guidelines on medical care, initially in government programs, but eventually extending such restrictions to private insurance.

Given the problems facing our health care system-high costs, uneven quality, millions of Americans without health insurance–it seems that things couldn’t get any worse.   But a bill based on these ideas, will almost certainly make things much, much worse.

Or maybe it’s all just a massive April Fool’s joke.

Topics: 
Health Care

New York’s ‘Not Austere’ Budget

By
Tad DeHaven

“Not Austere” is how the New York Times is describing the state’s $131.8 billion budget for 2009-2010.  As a colleague pointed out to me, “how bad does a budget have to be for the New York Times to call it ‘not austere’?”  Apparently, pretty bad.

In addition to an estimated $7 billion in tax and fee increases, total state spending would increase almost 9% when federal “stimulus” money is included.  Supporters dismiss the inclusion of bailout money in the totals, but for those who think the “temporary” federal bailout money won’t foster otherwise higher state spending going forward, I’ve got a lot for sale in Poughkeepsie.

The Albany Times-Union reported that Gov. Paterson cited public employee labor contracts as a reason for the budget increase.  Once again, the needs of the productive class (i.e., taxpayers) take a back seat to the bureaucratic class living at their expense.  Of course, New York’s policymakers were also able to find money for critical expenditures on “gun clubs, churches, a yoga foundation and the Wantagh American Legion Pipe Band, among thousands of other projects.”

The biggest tax increase is a surcharge on personal income taxes paid by “the wealthy” that is supposed to net state coffers $4 billion.  (Note to New York personal income tax payers: New Hampshire doesn’t have one.)  But other tax increases will hit all walks of New York life including an increased assessment on utilities, a motor vehicle registration fee increase of 25 percent, an increase in driver’s license fees of 25 percent, increased taxes on beer and wine, a tax increase on auto rentals of 1 percent, and possibly the most insulting – a new $100 fee on tax preparers (guess who’s going to ultimately pay that one?).

Topics: 
Tax and Budget Policy

Who’s Blogging about Cato

A few bloggers who wrote about Cato this week:

  • New York Times blogger Andrew C. Revkin wrote about Cato’s forthcoming full-page ad on climate change that will run in newspapers around the country next week.
  • Wes Messamore helped set the record straight: Cato scholars have criticized the growth of government regardless of who’s in power.
  • Brandon Dutcher posted Cato’s Monday podcast with Adam Schaeffer on universal pre-school.
Topics: 
Education and Child Policy, Finance, Banking & Monetary Policy, General, Government and Politics

Oh C’mon, NYT!

By
Thomas A. Firey

C@L readers know that I’m a fan of the NY Times’s news and business reporting. If you want depth and detail (especially today, when papers increasingly read like Tweets), the NYT’s news coverage is about as good as it gets.

The opinion page, sadly, is another matter.

Case in point, last Friday’s lead editorial chastising Japan and Europe for not adopting large fiscal stimulus plans. The lede:

The world economy has plunged into what is likely to be the most brutal recession since the 1930s, yet policy makers in Europe and Japan seem to believe there are more important things for them to do than to try to dig the world, including themselves, out.

That’s actually OK — the editorial board is free to believe (and espouse) that massive fiscal stimulus is the best policy for dealing with the current recession. But to use an old saying, they’re entitled to their own opinion, but not their own facts. Ignoring that admonition, the ed led off its final graf with this howler:

In a recent speech, Christina Romer, another of President Obama’s economic advisers, pointed out some lessons [sic] from the Great Depression: fiscal stimulus works.

If you follow the economic history literature, this is a stunner; some of Romer’s most important academic work demonstrates the opposite, namely that fiscal stimulus did little to get the United States out of the Depression [$] and subsequent U.S. recessions [$]. Has she rejected her own findings?

I tracked down the speech transcript and found out that, nope, she hasn’t; in fact, she was explicit that “fiscal policy was not the key engine of recovery in the Depression.”

Romer did go on to say that she strongly supports the Obama stimulus plan, believing it will be effective and worthwhile. But this belief is rooted in one school of economic thought (or ideology, to borrow from NYT columnist Paul Krugman), not history. Whatever the merits of Romer’s belief, the NYT’s line about the Depression proving that “fiscal stimulus works” is just plain horseradish.

In recent years, the NYT editorial board has repeatedly chastised non-progressives, claiming they put ideology over objective fact. Will the ed board scold itself?

Topics: 
Finance, Banking & Monetary Policy

Economists against the Stimulus

By
David Boaz

Cato has just published a full-page ad in the New York Times with the names of some 200 economists, including some Nobel laureates and other highly respected scholars, who “do not believe that more government spending is a way to improve economic performance” – contrary to widespread claims that “Economists from across the political spectrum agree” on a massive fiscal stimulus package. Of course, many economists don’t like to sign joint statements, so this is only a fraction of stimulus opponents in the profession. Greg Mankiw pointed to a few noted skeptics last week:

In a TV interview last month, Vice President Joe Biden said the following:

Every economist, as I’ve said, from conservative to liberal, acknowledges that direct government spending on a direct program now is the best way to infuse economic growth and create jobs.

That statement is clearly false. As I have documented on this blog in recent weeks, skeptics about a spending stimulus include quite a few well-known economists, such as (in alphabetical order) Alberto Alesina, Robert Barro, Gary Becker, John Cochrane, Eugene Fama, Robert Lucas, Greg Mankiw, Kevin Murphy, Thomas Sargent, Harald Uhlig, and Luigi Zingales–and I am sure there many others as well. Regardless of whether one agrees with them on the merits of the case, it is hard to dispute that this list is pretty impressive, as judged by the standard objective criteria by which economists evaluate one another. If any university managed to hire all of them, it would immediately have a top ranked economics department.

And of course Mankiw’s list isn’t comprehensive. There’s also former Treasury economist Bruce Bartlett, former Yale professor Philip Levy, former Ohio State and Federal Reserve economist Alan Viard, Russell Roberts of George Mason, and many more. Under the current circumstances, plenty of economists are endorsing large fiscal stimulus programs. But it’s just not correct to claim that there’s any consensus or that “every economist … from conservative to liberal” supports the kind of massive spending program that the Obama-Biden administration has proposed.

UPDATE: Martin Feldstein, whose support last October for a fiscal stimulus is the reed upon which journalists justify their claims about “economists across the political spectrum,” now calls this stimulus bill “an $800 billion mistake.”

Topics: 
General, Government and Politics, Tax and Budget Policy

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