The Few, the Proud, the SiCKO Audience

This fun quote from the Kaiser Family Foundation, which polled the public regarding Michael Moore’s film SiCKO, just landed in my inbox:

“Our poll shows how the combination of good timing, a controversial director, and lots of free media attention can generate real impact for a film that very few people have actually seen,” said Kaiser President and CEO Drew E. Altman, Ph.D.

Talking Cancer with the Candidates

The Lance Armstrong Foundation will host forums for presidential candidates today and tomorrow in Cedar Rapids, Iowa. The forums, Democrats today, Republicans tomorrow, will focus, not surprisingly, on health care and the fight against cancer.

As a cancer survivor, this is an issue of great concern to me. Unfortunately, we can expect both the questions and answers to focus around more federal spending for research and the Democrats support for a government-run national health care system. I wish Chris Matthews, who will moderate this forum, would point out to them that cancer survival rates in the U.S. have been rising, and that one reason for this is the free-market health care system that these candidates love to criticize.

The one common characteristic of all national health care systems is that they ration care. Sometimes they ration it explicitly, denying certain types of treatment altogether. More often, they ration more indirectly, imposing global budgets or other cost constraints that limit the availability of high-tech medical equipment or imposes long waits on patients seeking treatment. In the U.S. there are no such limits, meaning that the most advanced treatment options are far more available. This translates directly into saved lives.

Take prostate cancer, which I suffered from, for example. In most countries with national health insurance, the preferred treatment for prostate cancer is…to do nothing. Prostate cancer is a slow moving disease. Most patients are older and will live for several years after diagnosis. Therefore it is not cost-effective in a world of socialized medicine to treat the disease too aggressively. The approach saves money, but comes at a more human cost.

Even though American men are more likely to be diagnosed with prostate cancer than their counterparts in other countries, we are less likely to die from the disease. Less than one out of five American men with prostate cancer will die from it, but 57 percent of British men and nearly half of French and German men will. Even in Canada, a quarter of men diagnosed with prostate cancer, die from the disease.

Similar results can be found for other forms of cancer. For instance, just 30 percent of U.S. citizens diagnosed with colon cancer die from it, compared to fully 74 percent in Britain, 62 percent in New Zealand, 58 percent in France, 57 percent in Germany, 53 percent in Australia, and 36 percent in Canada. Similarly, less than 25 percent of U.S. women die from breast cancer, but 46 percent of British women, 35 percent of French women, 31 percent of German women, 28 percent of Canadian women, 28 percent of Australian women, and 46 percent of women from New Zealand die from it.

Even when there is a desire to provide treatment, national health care systems often lack the resources to provide it. In Britain, for example, roughly 40 percent of cancer patients never get to see an oncology specialist. Delays in receiving treatment under Britain’s national health service are often so long that nearly 20 percent of colon cancer cases considered treatable when first diagnosed are incurable by the time treatment is finally offered.

But the advantages of free-market health care go far beyond an absence of rationing. With no price controls, free-market U.S. medicine provides the incentives that lead to innovation breakthroughs in new drugs and other medical technologies. U.S. companies have developed half of all the major new medicines introduced worldwide over the past 20 years. In fact, Americans played a key role in 80 percent of the most important medical advances of the past 30 years. Eighteen of the last 25 winners of the Nobel Prize in Medicine either are U.S. citizens or work here.

Obviously there are problems with the U.S health care system. I am sure we will hear plenty about that during these forums. But it is important to understand that for all its faults and all the criticism that it has received, the United States’ free market health care system has made it the place you want to be if you have a serious illness. Millions of cancer patients have discovered that. It would be nice if Lance Armstrong, Chris Matthews, and the candidates would stop to think about this.

Unfair Criticism of the Fair Tax

Regular readers know that I think the flat tax is the more astute tax reform option, but I admire the Fair Tax because it has the same pro-growth features as a flat tax (low tax rate, no double-taxation of saving and investment, no special loopholes, etc). As such, I feel compelled to offer a partial defense against Bruce Bartlett’s anti-Fair Tax column in the Wall Street Journal. Bruce notes some of the political obstacles to a national sales tax, and I largely agree with those observations, but Bruce also says that Fair Tax advocates are wrong to advertise the “tax-inclusive” rate. It is true that ordinary Americans think of “tax-exclusive” rates when looking at state sales taxes, but the Fair Tax people are seeking to compare their proposal to the current income tax, which is calculated on a “tax-inclusive” basis. So while it’s true that sales tax advocates should not let people assume that the Fair Tax is calculated the same way as a state sales tax, this does not mean the “tax-inclusive” rate is not an appropriate measure when looking to overhaul the tax code. Bruce also cites the revenue estimates of the Joint Committee on Taxation as if they were carved on stone tablets, but the JCT has a long track record of inaccurate predictions because of their assumption that tax policy has no affect on economic growth. Using the JCT as an authority is akin to letting the other side serve as both player and umpire:

In reality, the FairTax rate is not 23%. Messrs. Linder and Chambliss get this figure by calculating the tax as if it were already incorporated into the price of goods and services. (This is known as the tax-inclusive rate.) Calculating it the conventional way that every other sales tax is calculated, with the tax on top of the price, yields a rate of 30%. (This is called the tax-exclusive rate.) The distinction is confusing, but think of it this way. If a product costs $1 at retail, the FairTax adds 30%, for a total of $1.30. Since the 30-cent tax is 23% of $1.30, FairTax supporters say the rate is 23% rather than 30%. …professional revenue estimators have always concluded that a national retail sales tax would have to be much, much higher than 23%. A 2000 estimate by Congress’s Joint Committee on Taxation found the tax-inclusive rate would have to be 36% and the tax-exclusive rate would be 57%. In 2005, the U.S. Treasury Department calculated that a tax-exclusive rate of 34% would be needed just to replace the income tax, leaving the payroll tax in place. But if evasion were high then the rate might have to rise to 49%. If the FairTax were only able to cover the limited sales tax base of a typical state, then a rate of 64% would be required (89% with high evasion).

School Money for Nothing

If you want a very concrete example of what plagues the public schools in Washington, D.C., this story is for you. Bottom line: D.C. Public Schools are going to shell out $5.4 million this year for 68 employees who are currently slated to do … nothing.

It turns out these folks have no role in changes being made to the District’s school system, but they are too senior to let go. And this is a relatively small personnel hiccup for D.C. In 2003, the District “discovered” 640 employees who ended up costing $31 million.

It’s these sorts of things that make one think that perhaps funding really isn’t the primary problem in D.C. schools (that, and the nearly $20,000 per student D.C. has available), and that maybe — just maybe — it’s the bloated, lumbering system itself that’s the real educational enemy.

No Veterans of Foreign Wars Need Apply

“As some of the leading presidential candidates trooped before the Veterans of Foreign Wars in Kansas City this week, there was one thing largely missing at the lectern — veterans of foreign wars,” writes Peter Baker in the Washington Post, contrasting this year’s campaign with past election years.

Baker grades both former presidents and current candidates on a steep curve. He writes, “Every president from Harry S. Truman to George H.W. Bush served.” But LBJ, already a congressman, went on investigative missions for FDR, admittedly flying around the South Pacific combat zone. And the nearsighted Ronald Reagan made propaganda films in Los Angeles. He even counts George W. Bush as a veteran on the basis of his Texas Air National Guard service.

As for the current candidates, 

“The torch is being passed to a new generation that’s never worn a uniform,” said Kenneth T. Jackson, a military historian at Columbia University. “It’s a significant change. It means people are now coming of age who are really the post-Vietnam generation.”

But is that really true? The leading Democratic candidates are a woman and a man born in 1961. But John Edwards, born in 1953, Bill Richardson (1947), and Joe Biden (1941) are not “the post-Vietnam generation.” They’re the non-Vietnam generation. A blogger has some more details about the Vietnam records of 2008 candidates here.

As for the Republicans, John McCain famously served, as Baker notes. But Mitt Romney (1947), Rudy Giuliani (1944), Fred Thompson (1942), and Newt Gingrich (1947) are, like their Democratic counterparts, within the age cohorts who went to Vietnam. They weren’t post-Vietnam, just nowhere-near-Vietnam. Mike Huckabee (1955) and Sam Brownback (1956), along with Barack Obama, would seem to the only candidates who are actually from the post-Vietnam generation.

Does this matter? It used to matter to voters. When I asked my parents in the 1960s, about 20 years after the end of World War II, why all the local candidates listed themselves as veterans on all their campaign literature, my mother told me that you’d wonder what was wrong with a man who hadn’t served in “the war.” Today, some worry that military veterans might be more eager to go to war. Historian Jackson sees it differently: “When you have leaders who haven’t gone [to war], I do think it changes the equation a little bit,” he told the Post. “It’s a little bit worrisome. People who have actually been to war … are actually a little less inclined to go to war. Generals know what war’s about, and they’re less enthusiastic to go rocketing off than civilians.”

That reminds me of Robert Heinlein’s novel Starship Troopers, often denounced as militaristic or even fascist, especially by people who have only seen the movie. In the novel, only military veterans were citizens with voting rights. But the basis for that was classical republicanism: that only those who were willing to defend the society, and who by facing combat had come to understand the real meaning of power and war and violence, could be trusted to lead the society.

At the very least, candidates who have never served in a war should have some special humility in urging that other Americans be sent to war.

The Myth of Pre-K

From the Washington Post comes another shoddy mainstream media report on the magical benefits of pre-kindergarten. The only controversy reported in the piece is between those who want universal pre-K and those who just want the program to target the poor. I guess the reporter couldn’t imagine someone having a reasonable argument against government provision of pre-K.

Government pre-K supporters say that it saves money by preparing young children for later schooling. In truth, pre-K costs billions of dollars but returns little benefit. Supporters base their claims on reports that have been proven wrong; they make wild and ungrounded assumptions, elementary mistakes in calculations, and conflate the effects of preschool with other major interventions in the participants’ families that some programs have made.

When we look at actual universal pre-K programs in action in Quebec, Georgia, and Oklahoma, we see that pre-K costs far outweigh the benefits. Indeed, in Quebec researchers found that the program has had a negative effect on some students. And even the good effects fade out as the students move through grade school.

The government school lobby is trying to change the subject and grab some more money on top of the half a trillion dollars it already commands. Pre-K is no substitute for fixing our K-12 education system.

It’s ridiculous that pre-K supporters try to trick the public into a billion-dollar boondoggle based on myths. If they want to help poor kids and make good use of education dollars, there is one proven policy, and that’s school choice.

The small choice programs already operating have saved states at least $444 million and improved the lives of thousands of kids. And if you want pre-K, funding private provision of it through education tax credits makes a lot more sense than expanding government-run pre-K. Pennsylvania already has a corporate donation tax credit pre-K program for low-income kids that’s helping thousands of children with a relatively small amount of money.

Pre-K is just the latest money grab from a government education industry that desperately wants to change the subject from its failure to deliver in K-12.

What we really need is educational freedom through education tax credits.

Soak the Rich with Lower Tax Rates

Ever since the supply-side tax rate reductions of 2003, the economy has prospered and this has generated a windfall of tax revenue for the Treasury. The Wall Street Journal notes [$] that the lion’s share of this new revenue is from upper-income taxpayers.

There are many factors that influence the economy’s performance, so this does not necessarily prove that the 2003 tax cuts “paid for themselves.” But the windfall certainly bolsters the argument that the right types of tax cuts (lower marginal tax rates) have a positive impact on growth and that this means at least some revenue feedback.

Writes the WSJ:

Since the Bush tax cuts of 2003, the budget deficit has fallen by $217 billion mostly because of a continuing torrid pace of revenue growth. …For the Bush tax cuts to have been a give-away to the rich, people paying the higher marginal tax rates would have to be carrying a smaller share of the income tax load. But the IRS data indicate that they are not paying less. Instead, they are paying more — lots more. More surprisingly, the richest 1%, 5% and 10% of the taxpayers are shouldering a larger percentage of the income tax burden at the federal level than the tax estimators said they would had the Bush tax cuts never materialized. …The amount of tax paid by those earning more than $1 million a year increased to $236 billion in 2005, up from $132 billion in 2003, the year of the tax cut. This was a 78% increase in taxes paid by millionaire households.

…[L]ower tax rates on capital gains and dividends also caused a huge jump in reported income. The National Bureau of Economic Research found an “unprecedented surge in regular dividend payments after the 2003” Bush tax cut. Likewise, the lowering of the capital gains tax was followed by a 150% increase in the amount of capital gains unlocked by the 15% tax rate. Lower tax rates expanded the tax base.

…The supply-side revenue effects on the rich are remarkable: Tax rates on higher incomes have been halved, but the federal tax share of the top 1% has nearly doubled.