Tax reform?
The one statement in this that made me cringe came at the end: "How to pay for a bill will certainly be a key factor in how reform moves forward."
UGH Can I strangle this writer? Government isn't paying for anything? Taxpayers are! Everything government spends comes from the pocket of a taxpayer and government isn't "entitled" to one red cent! We don't need to pay to keep our own money! Government needs to stop spending money it doesn't have!
UGH Can I strangle this writer? Government isn't paying for anything? Taxpayers are! Everything government spends comes from the pocket of a taxpayer and government isn't "entitled" to one red cent! We don't need to pay to keep our own money! Government needs to stop spending money it doesn't have!
Here's my proposal for setting budgets: you get to budget to spend AT MOST 90% of what was actually brought in in tax receipts two years ago and that must include debt service. The other 10% goes toward paying down the debt until it is GONE, upon which we start putting money aside to deal with wars and natural disasters.
That would be great. If we just froze spending at the same levels, the problem would melt away to growth and inflation. People in gov't consider even that to be a radical "cut".
1. Increase in tax receipts. This happens when businesses and populations are growing. 2% wouldn't be a hard target to make if taxes are cut to spur business growth.
2. Decrease in spending. This will only be possible if Congress is willing to make it happen. Both Democrats and Republicans have become drunk on easy spending and unlimited borrowing.
3. Relatively stable interest rates. If interest rates increase too quickly, tax revenue can drop dramatically as consumers spend less and businesses have slimmer margins. Increasing interest rates also increase the debt service burden and lengthens the balancing time.
4. Entitlement spending is set to increase at a rate which far outstrips the growth in tax revenue and because they are mandatory programs, funding comes before other discretionary funding. Thus outside of this proposal, a secondary law would of necessity be passed capping or revising entitlement spending.
If the plan were actually held to and the surplus went exclusively to debt service (and assuming nothing else changes), the debt would be retired in 2041. ^
# Note that the same projections show that an increase in receipts of only +1% each year drags out the balancing until 2025. This should be noted to show the power of compound interest and that (contrary to Democrats assertions), we do not have a revenue problem or a "paying-for problem", we have a spending problem.
^. Note that the same projections showing an increase in receipts of only +1% each year drags out the debt retirement date to 2049.
If the U.S. government begins balancing its budget, it will issue no new money. Therefore the money supply will remain constant while the amount of goods and services increases. This means that the value of each dollar will increase relative to the amount of goods and services it can buy. This may appear to be a good thing compared to the opposite situation we face today, but it isn’t. Freezing the currency in place would favor creditors over debtors, who would be forced to pay back their debts in appreciating dollars as their nominal wages were being forced down. Such a situation could not be maintained for very long in today’s political climate.
If the goal is a stable unit of account and medium of exchange, one which neither appreciates nor depreciates, the growth rate of the money supply must approximate the growth rate of goods and services in the economy. In a fiat economy, this means that the federal government must spend more money than it receives in taxes. But the government does not have to go further into debt to do so, it can simply “print” enough money to cover the deficit. The inflationary effect, if any, will be the same in either case.
Central banks can increase/decrease the money supply without regard to federal borrowing. Fiscal policy and monetary policy are separate things.
I hope cryptocurrencies will become competition for central banks, so even if central banks remain, it will be harder for them to buy gov't debt w/o causing inflation.
We've given them "entitlements", free everything, tax-exempt statuses, free education, now free or subsidized medical care, government jobs, and very good pensions. There's some military money in there too. And of course, the interest on the $14 trillion National Debt, which foreign governments and the big banks just love.
The new US motto should be engraved on the Statue of Liberty: "Come get yo FREEEE money!"
One minor correction, the total current debt has passed $20 Trillion and Congress is looking to authorize another bump in the debt ceiling...
I used to think Rand Paul was a Libertarian, but now see he is an egotistical, zeal-idiot. Rather than support "better", he waits for "best", while "worst" succeeds. This is why Libertarians are marginalized.
To save face they should have passed something very similar to PPACA and called it "repeal and replace".
If they actually want reform, I think they should add little market-based provisions:
- Make HSA-compatible plans no longer required to contribute to HSAs.
- Make a contracts for patients to pay for medicine only enforceable if a cost estimate or pricing sheet is provided prior to service.
- Make it easier for providers to operate via telemedicine and provide low-cost service in pharmacies and shopping centers.
- Relax rules on prescribing drugs, so someone who knows what maintenance drugs he takes can choose to buy them without a "med check" visit.
- Make medical expenses an above-the-line deduction so people buying medicine get the same tax treatment as a company buying a health insurance plan.
I'm not sure if they could get all that, but maybe they could get some of it. I wonder how people would react to get a taste of freedom. They would choose whether to treat one kid's rash with the same $10 ointment that worked when another kids had a similar rash two years ago, or whether they should pay $200 to talk to have a local expert look at it. Maybe they decide to go in the middle and have a low-cost doc look at it over an app. They would make all kinds of little decisions like that for themselves. And the money would go into the HSA tax-free, grow tax-free, and come out tax-free, regardless of their insurance policy.
"I used to think Rand Paul was a Libertarian"
I have not followed why Rand Paul opposed the changes, but maybe it's because he thinks the bandaids might work and "save" PPACA from collapse.
I agree that in general libertarians have a hard time making moderate incremental steps. When I mention slowly phasing in modest reductions each year in federal spending, libertarians yell "why modest? Why slowly?" is if a radical decrease were a realistic possibility.
One key problem is people (including me) want a vehicle to spread the risk of an unforeseen health problem, the same way we use insurance to spread the risk of other perils. That's getting harder to do. It seems like we need to separate the problems of a) spreading risk, b) helping the poor, and c) managing healthcare purchases.
A starting point might be market reforms aimed only to help people manage their pre-deductible expenses more efficiently. If people like the freedom that comes with it, it could be expanded.
1. spreading risk
2. helping the poor
3. managing healthcare purchases
1. Risk. There are several grave misconceptions about risk which must be acknowledged and which render this discussion objectively moot. First, risk can only be identified and evaluated individually - never collectively. My fear of heights makes my risk evaluation of skydiving substantially different from someone else. And while actuaries certainly attempt to create risk pools, these are for the effect of managing on the side of the business in aggregate - not the individual policy holder.
Second, risk is ever present in varying degrees and which we do no consciously entertain. We literally risk our lives every day driving to work in the face of the 40,000 vehicular deaths every year (http://www.nsc.org/learn/NSC-Initiati....
Third, reward is rarely considered when evaluating risk in healthcare. It is considered a given that people should always be in good health and that such is a "right". This is simply a mistaken - albeit popular - assumption.
2. Helping others. This actually comprises two questions: 1. Does one person have an obligation towards another's welfare and 2. Assuming Yes to (1) is it permissible to coerce some to provide for others. This is primarily a moral question. Objectivists outright disavow the obligation, thus rendering any answer to #2 irrelevant. Conservatives hold that there may indeed be some obligation, but that the obligation is self-imposed and coercion is not permissible. Progressives hold that there is indeed and obligation and that those in power hold the authority to coerce from some the means of "helping" (really redistributing) to others. Each of these positions is worthy of its own extended discussion.
3. managing healthcare purchases. This isn't really an independent concern, but merely an outgrowth of both #1 and #2 above.
If one ascribes to the moral philosophy of the progressive, then those in authority have a duty and obligation to coerce some into providing for others and that part of that duty and obligation include deciding (on behalf of the coerced) how the coercion is to be enacted and (on behalf of the "needy") how risks are to be assessed and how needs are to be met. The progressive assumes a governmental prerogative of deciding for a host of others how they will assess and deal with risks and rewards.
If one ascribes to the moral philosophy of the conservative, they reject the notion that decisions about risk and reward may be made on behalf of someone else, but take upon themselves to exercise judgement on their own behalf as to how to address the needs. Thus a governmental prerogative is not warranted, but an individual response is.
Objectivists simply take the line that the individual is responsible only to themselves: that both evaluation of risk and reward AND dealing with the consequences of life - whether through choice or chance - are up to the individual to deal with. Neither governmental nor individual response is implied (though an individual may respond).
(more below)
Insurance companies do a good job pricing the risk of accident, unexpected death, fire, etc.
"Does one person have an obligation towards another's welfare ""
I say no. I think it's a good idea for the gov't to help the needy, though, and all the reasons why go beyond this healthcare discussion.
"managing healthcare purchases. This isn't really an independent concern, but merely an outgrowth of both #1 and #2 above."
I agree with what you write about people making their own decisions and accepting the consequences. My use of the phrase "market reforms" was confusing, making you think I want the gov't to manage things. I was saying the opposite.
There are two phrases in this statement which deserve particular attention. The first is "market reforms". The presumed need for a reform to the "market" stem from a progressive mindset. Left to its own designs, the market is the single most efficient method of pairing scarce resources with customer demand. This is because it is the aggregate decision-making of millions of individuals looking out for their own perceived best interests. The notion that this individual self-interest should be overridden by a few elites who want to control that decision-making process is solely for the sake of their own power. It is deceptive both on the sides of the self-appointed elites who think themselves superior in capacity to others and on the sides of the lazy populace who seek to avoid making decisions and facing the consequences.
What should be recognized is that it is only because of the misbegotten assumption of a few elites that they 1) can and 2) should control the decision-making process of others that the market has become distorted in the first place. Thus what is conveniently ignored in the call for "market reforms" is that such are only "necessary" because the market was artificially tampered with in the first place! It is the classic case of claiming that we need to fix a broken clock gear not by removing the spoke wedged in the works but by trying to add on more gears to bypass the problem.
The second phrase of concern is "help people manage". Again, this is the second misbegotten spawn of the elitist mindset that assumes that people are incapable of making decisions in their own interests. Too often elitists deliberately prevaricate by confusing "educational" assistance with actually substituting themselves into the role of agent/decision-maker. They further deceive themselves and those they claim to want to "help" in assuming this role because they in effect deny the individual so misplaced by gaining for themselves the invaluable experience that comes with making decisions and being responsible for the outcomes of those decisions. The attempt by the elitist is couched in terms of "sparing them from negative effects", but in very fact denies them the chance to make good decisions as well as to learn from poor ones. What is even more insidious in this is that all too frequently, the elitist is confronted with the effects of their own poor decision making (which has ruined the lives of others) and then claims that it is not their fault or wasn't their intent or some other form of deflection. They want the power which comes with making decisions, but want to avoid the consequences of actions gone awry. What is incredibly hypocritical about this is that this is the very reason they claim to want to usurp the original decision-making authority in the first place!
No. We don't need market reforms. We need governmental reforms that remove the sticks lodged in the collective gears of the market. We don't need to make decisions for others. We need to offer to truly educate them, but to allow them to face their decisions - and consequences.
I see how it sounds like I meant gov't fixing the market, but I meant gov't NOT trying to fix the market. My idea if we assume it's politically impossible to touch PPACA, then they could focus on allowing market forces in the areas not currently paid for by insurance. My thought was if that helps people (technically helps them by gov't not "helping") maybe they would be open to changing PPACA.
I think people know that's like saying you should only buy homeowners insurance after you're house burns down or only buy car insurance after you have accident.
I think the mandate was one of the best things about PPACA. Before PPACA, people with no money and no insurance would turn up at providers and get care. Responsible people with money and/or insurance carried them-- backdoor socialism.
Even if we denied them care, the underwriting process was somewhat onerous. I spent a lot of time documenting that the time I got muscle relaxants after throwing out my back shoveling snow was really nothing. It makes sense for them to be caution. I knew someone in college whose doctor said something looked serious, so he ought to go take out an insurance policy before running further tests in case it turned out to be expensive to treat. Responsible people would buy insurance (or have money to pay for it) BEFORE they got sick. So PPACA bypasses that entire process and makes everyone buy the insurance, so therefore insurance companies don't need to spend all this time working out whether someone's already sick and fraudulently trying to insure against sickness after the fact. It gets you to the same place we'd be if everyone were responsible and got insurance long before any sign of illness.
On top of all this, technology to predict illness with genetic testing is getting better. So it's becoming less of an insurable peril like lightening striking.
I am hugely in favor of some sort of individual mandate. I was going to be roped into to pay for the irresponsible anyway when they turned up in the ER. So I'm totally in favor of making them pay their own way.
The mandate decreases that.
How is that? It seems like it's a direct way to make people pay for their own care. A more direct way would be to provide no care for people who do not pay, but I have never seen that in my lifetime.
If everyone paid their own way without gov't interference, it would be like any insurance. Responsible people who don't have enough wealth to cover a peril buy insurance against it. If you don't buy insurance and the peril happens, it's too late to buy insurance; you have to pay for it with your own wealth. If you don't have enough wealth, you cannot pay for it.
Health insurance was complicated because if people didn't insurance against or have money, they always found ways to rope other people into paying. Since health problems are harder to detect than other perils like car accidents, a lot of of effort had to be expended to make sure the peril (sickness) had not already happened.
PPACA comes along and says since in an ideal world everyone would buy it before the peril occurs, let's just make everyone buy it. At that point we can eliminate all the effort expended to make sure sure the peril hasn't already happened, i.e. to make sure people aren't waiting for signs of sickness before buying insurance against sickness.
Many elements of PPACA and even the whole notion of forcing people to buy an insurance product are troubling. But it does have the effect of not roping me into paying for their care.
It sucks at all those scenarios, including if you want to insure against only certain health perils, have a high deductible, have a maximum limit-- you can't do it. I get a list of 57 plans, and when you drill down they're all following one rules, so there is no real choice. The only choice is which providers they have arrangements with, which they market as a feature, but it's more like a bug. It's difficult or impossible to find straightup insurance against health problems that just makes you whole. There's no more underwriting, no more pricing risk, no more variation in insurance products, but the people in those large insurance buildings need to do something, so they manage contracts with providers.
As a result, patients neither know nor care what things cost. We have virtually eliminated the power of consumer-driven, free-market discipline from one-sixth of our economy."
Nothing could be further from the truth.
It has the effect of forcing you to always pay for their care, just as medicare does. It also eliminates the cost control link between service received and payment for service. This forces medical costs upward exponentially with insurance companies chipping the pot for profits in response to uncontrolled higher and higher costs. Everyone pays regardless of health and medical purveyors are irrationally rewarded for treatments that do no good whatsoever, even when side effects are worse than the original ailments.
I could have had the entire Trump agenda completed by now. Probably Trump could have also if it wasn't for congress. This proves that at least, a few of them are awake.
I shouldn't have to pay tax on my taxes!
Wanna try again?
Cutting off loopholes if fine with me, if the basis is consistent. Using a rule designed to close loopholes 50 years ago on the top 100 people to enslave a low number of high earning workers to pay a majority is not appropriate, objectively consistent or in any interest of controlling government spending. If they want to close loopholes (which they really don't want to do, because they are the power of the devil), the "alternative minimum rate" needs to be referenced to some middling value, not a cutoff of deductions at that earning level.
I can only assume you never got hit with it, and wondered how you could be paying more than twice the national average income in taxes. I for one, am unbelievably pleased that I might actually make more than some of the people that work for me now, or my peers whose wives stay at home, spend and primp.
Anything else on this subject?
I agree that in general, however, the government is just out to take more and more from our pocketbooks.
Effective spending reform should be tackled first.
http://www.usdebtclock.org/
Oops! Must have missed the news. We made it! We made it! We made the big 20! Yippee!
"We're from the government and we are here to help you."
"Damn the (debt)! Full speed ahead!"
Obama to Joe the Plumber: "I want to spread the money around."
And the hypocrite did just that, saying, "It's all Bush's fault."
https://www.youtube.com/watch?v=1kuTG...
My dangerous dino mind was on a roll.
See the screenshot from when I read the article:
https://postimg.org/image/hl2kjcsc5/
Record investment in families!