Wednesday assorted links


1. McArdle: "As I already mentioned, it makes a lot of fiddling tax changes -- restoring deductibility of health insurer compensation in excess of $500,000, repealing things like the tanning tax, ending the Medicare surtax on high earners, and so forth." The "and so forth" is a $600 billion tax cut primarily for the wealthiest taxpayers. I wouldn't call that a "fiddling tax change". But I wouldn't omit bankers from my list of people who could learn something from the upside of down, especially if I were to make my list right after the financial crisis.

You even quoted the part where she says "As I already mentioned," where she talked about this.

McArdle: "The bill is pretty good on the tax side, in terms of repealing the squintillions of fiddling little taxes by which Obamacare helped fund itself." And who pays those "fiddling little taxes"? The wealthiest taxpayers. McArdle's being almost as disingenuous as Paul Ryan, who refused to answer questions about the big tax cut for the wealthiest taxpayers that's the real story about his proposal.

And who pays those “fiddling little taxes”? The wealthiest taxpayers.

Is that why she said "So who does like this thing? Well, um, I guess rich donors and the taxes-uber-alles wing of the conservative movement."

With enough obtuseness, we can repost her entire column in these comments. Keep it up!!

"With enough obtuseness, ..."

Please, don't bait rayward. He'll go there.

This is typical and predictable GOP stuff, though- no Trump needed to cut taxes on high income folks.

I view the Medicare taxes as separate from Obamacare. Medicare, unlike Social Security, has been on a path of transforming itself from a payroll tax to an income tax ever since 1994, when they increased and later eliminated the cap on taxable wages. The ACA extended Medicare taxes to "unearned" income, getting it most of the way there.

And this makes sense to me. The link between taxes and benefits under Medicare was always much more tenuous than for Social Security, and Medicare is in much worse financial shape, so it will require an infusion of general revenue in the next few years regardless. (Social Security, by contrast, can be made viable indefinitely with modest tweaks to the current benefit and tax structure.)

If you really want to simplify these "fiddling" taxes, eliminate the Medicare payroll tax and increase marginal income tax rates by 3.8% across the board, which is essentially what the current complicated system amounts to.

The cruelest ACA "taxes" (if ACA were not a "tax" it would be unconstitutional) fall not on the wealthiest but on the 96% of Americans, worst hit are millennials, in the forms of sky-high premiums and increased deductibles; massively expanded Medicaid costs.that will bankrupt their states; and millions of high-paying jobs aborted by ACA.

Anyhow, as with all liberal boondoggles, ACA is stealing from your neighbors with the government as the middleman. And, the confiscations and misallocations of resources retard economic growth and prosperity. It's one (for all of the eight years of Obama necromancy) cause of the Real Median Household Income decline of 6.4% from $57,744 to $54,045.

Better to leave ACA alone and watch it implode and laugh - the Dems own it.

If this garbage, so-called repeal goes through, the system still will implode. But, the GOP will own the catastrophe.

Why not call your bluff. Leave the ACA alone for the next 4 years.

"Why not call your bluff. Leave the ACA alone for the next 4 years."

Because it will crash and burn. It's already in a death spiral, with insurers dropping out and rates going up. Soon, enrollment will start dropping, as the price increases ensure that it's a bad deal for the healthiest participants. Then Republicans will be blamed regardless of whether they left it alone.

Massachusetts has been operating since Gov Patrick got Romney care running circa 2009, and it has very nicely stabilized after about five years of the exchanges. So, two more years, and the 30 States that embraced Obamacare will likewise be stable.

Lots of heavy breathing about insurers pulling out of California, except almost all parts of California have three or more insurers offering well over a dozen choices.

Where insurers have pulled out are where the providers are shifting costs of the working poor without Medicaid to the insured patients. The States where Medicaid was not expanded.

Why is this happening now? Obamacare is ending the hospital bailouts so they must bill those who can pay, insurers, or go bankrupt from the poor who get free health care by not paying medical bills.

If you were an insurer paying the medical bills of the uninsured, would you keep writing policies?

Conservatives argue that costs will be zero if you set the price to zero.

The price paid for treating gunshots is zero, so the medical cost of gunshot victims is zero. Free lunch economics.

TANSTAAFL. Insurers won't play the Republican free lunch health care game.

In fairness, Megan does make sure to include mention of the taxes.

But where her analysis is misguided is that it fails to make the very clear point that the reason for this replacement is precisely to repeal the taxes. Repealing the taxes is the only thing this legislation does cleanly, and it's why Grover Norquist said he likes it.

Literally the only thing about this proposal that is not negotiable is eliminating the taxes. That will become clear as Senate R'd start to weigh in more substantively.

#1: It's rather obvious that the GOP did not want Trump to win and they were planning for life with Hillary. That's why they have nothing to offer now. It's increasingly clear that hey have no intention of doing anything. The ruling class is now on strike.

Were you the guy who just argued against expertise? This is your bed. Lie in it.

If your team had anything other than complete hatred for white blue collar workers, HRC would be President today.

You are a particular placeholder here Thomas, but I will answer nonetheless.

The failed American Jobs Act was "my team, the wonk's team" answer for blue collar workers. Who defeated it in all iterations and why?

It was a very strange twist to go from opposing ALL Democratic jobs bills to saying Democrats hate workers, but a certain sort of empty headed troll can manage it.

The rhetoric is of hatred, disdain, mockery, and disgust.

As for your inane point on jobs programs (which us AA), Trump isn't the RNC.

Who was it that cheered as Hillary calle middle US white men deplorable? Oh, yeah, it was you, Boonton, and the rest of the clown car that composes MR leftists, as well as every influential lefty.

No, the bad moment was when some on the right roped themselves to the racists, the misogynists, the liars and frauds and said "yeah, we are deplorable!"

You prove my point. Go punch a nazi.

Excuse me? Did you just tie yourself to a Nazi? Did you leave it to "the left" to oppose Nazism?

Coal miners around the start of the Regan era: 200K
At the end? 100K

Start of Obama era: 100K
End 97K

Barely any change even though there was supposedly a 'war on coal' and coal suffered a lot due to cheap natural gas, increased use of wind and solar, etc.

While I'm sure there are black coal miners I can't think of any job that's more 'blue collar white worker' than coal miner. If that's what 'complete hatred' looks like better to be hated by Democrats than loved by Republicans.

No, you moron. They wish they were installing wind and solar.

"Clingers, deplorables, racists, sexists, homophobes, fly-over country, ignorant, uneducated, redneck, hillbilly, white trash, trailer park, electoral college is racist, America was never great, browning ofAmerica!, white privilege, Christians are just as likely to commit terrorism as muslims, serial killers are white males, backwards, xenophobes." Democrat party and anon on white men in between NY and CA

Thomas has another non-response. Plenty of lies and vitriol though, as usual.

I can't speak to the matter of the response or not, as I've not followed the discussion carefully. But when I saw the list of slurs and insults, I paused, thinking it was a far left list of everything wrong with the fine folks it -- the far left -- finds reprehensible. Are you telling me this is not standard fare?

Thor, if you can see that it is a laundry list of fear about some "far left," you can see that it does not contribute to moderate and pragmatic solutions.

The Tavis link below talks about that, how social media corrupts democracy.

Oh, that looks odd now. I used "moron" above in response to a now missing comment about "wanting coal miners dead." No one wants coal miners dead.

How does cutting taxes for billionaires and reducing services which benefit the working class and provide them with a degree of economic security ... help blue collar workers?

The revolt against traditional Republican politicains was because enough of thohse blue collar workers you're so concerned about were the very last concern of billionaire Republican supporters, except when it came time to enchant their way to the poills so they could vote against their interest.

As much as nearly any economist can speak about how Trump's plans are almost certainly not good for the economy in the long run, at least it can be fairly easily understood that they can see Trump as representing their interests more than the other Republicans. For the fact of the way he speaks, the concerns he speaks of, etc.

Problem is, the actual policies he plans to implement will stiff the blue collar class yet again, with the exception of a possible temporary boost to old economy jobs which wlil almost immediately be undone by additional trade frictions and further mechanization.

That wasn't his point. The elite tell us commoners they're capable and deserving of rule, but when it's time to step up to the plate they call a forfeit. This is why we need a new elite, and the current elite should be jobless. Many should also have their personal assets confiscated.

Nope. 8 years of gridlock, voting down expertise, trying to prevent solutions, followed by "what did expertise ever do for us?"

I don't know, maybe we are back to media silos, and social media reinforcement. A certain block of voters believed Fox and Rush when they said jobs bills were socialism, and then (that forgotten) believed Fox and Rush when they said elites hate workers.

If you have the long term memory of a hamster, it all works.

Nope. 8 years of gridlock, voting down expertise, trying to prevent solutions, followed by “what did expertise ever do for us?”

You had a supermajority in Congress for two of those years and the Republican opposition was not under any obligation to embrace your tar-babies. (You've never offered any real solutions in this domain or any other).

Elite are attempting to elect a new people, hence the double-down on identity politics and telling extant citizens to shut up and die already. So the extant citizens voted for the guy who said he was in their corner. And since we're going to be doling all this tax money around any way, then we want to make sure our tribe gets its cut. Actually, we'd prefer all of it but one has to be practical.

This is the future the Left chose. Now their tactics are being deployed back at them and they are melting down with rage.

Show me your wonkery. What are the better programs for jobs being offered now, what is their math. Cost per job, anyone?

Of course it was not my point. That idiot anon is just a crackpot who fills up this site with anti-Trump rants.

This is a pro-expertise argument, but you cannot distinguish. Noted.

You need good ideas before anyone will give you a chance.

Any good ideas?

Just smoke and mirrors?

No, that's probably another hallucination. You really should seek professional help. Take dickhead and his "+1" with you.

Here is a test of how far apart we actually are. With what percentage of this do you agree?

Largely true, but not totally. Trump is new to legislation, but he learns fast. He can pin this on the Repubs and Dems if nothing is done and Obamacare continues to circle the drain. He is a very good negotiator.

Shred of evidence that he "learns fast" will be welcomed, amplified and humdingered across the internetosphere. Unfortunately, it's not true.

And to the question of whether he is a "good negotiator," he promised to negotiate drug prices in the campaign, many times. Then he meets with the PhRMA CEOs and they play him like a fiddle. He walks out of every meeting parroting the viewpoint the people he met with. I'm glad he me with Elijah Cummings today...something tells me it won't last long, because has important discussions coming up, with people like Harvey from TMZ. Sad!

His style of negotiation leads to significantly reduced need to exercise the middle finger, with all the practice that will already have been had.

Makes for good TV I hear.

1. Another installment in the saga "Worst Political Class in History". In this episode, we see how Paul Ryan and Addison Mitchell McConnell suffer from delusions of adequacy.

'Another installment in the saga “Worst Political Class in History”.'

Though don't even break the top 10 of the 20th century.

Geography. It's great stuff.

History, it is not limited to America.

That's why they need a world map in classrooms. My one and only dream for American education.

Agreed except for McConnell. He will weather this overall incompetence very well. These are all Trump's and/or Ryan's babies. They will have to own them. It's all about survive and run again for a pro like McConnell.

It’s all about survive and run again for a pro like McConnell.

Uh huh. You'll notice that among his predecessors was Howard Baker, not anyone's idea of a conviction politician. Baker worked f/t until he was 80 and never completely retired. Public office accounted for about 35% of his time in the workforce. He was 54 years old during his last campaign for elective office. He lived his last years not in Washington, but in Tennessee.

McConnell (b. 1942) has been on public payrolls for all of about a half-dozen years since 1967 (after getting a dodgy discharge from the military), accomplishes diddly / squat (except for travesties like the ExIm Bank maneuver) and will not go away. (His wife, btw, has never lived in Kentucky).

5. There is one essential centripetal force that is a gigantic factor now and a minimal one at the time of the Whigs: the ideology of the Supreme Court. Breaking from Party loyalty risks tipping the ideological balance on a Court that decides many divisive social issues for 30-40 years.

The new health insurance plan: What is needed is to get the federal government out of this and to give the individuals more choice and options. A young healthy person should not have to pay a higher premium to subsidize an older unhealthy person. Employers should not be punished for not providing health care. This provision has harmed small businesses and negatively impacted employment. Remove the mandates, the subsidies and the federal government from this equation.

"A young healthy person should not have to pay a higher premium to subsidize an older unhealthy person. "

I'm not an expert, but isn't this how health insurance works? So even if we get "the federal government out of this" I can't see how that changes the subsidy equation. If older people, who are sicker, pay the actual cost of insuring themselves, seems to be that would be prohibitively expensive and the insurance market would then be made up entirely of young healthy people.

Am I missing something here?

No, it's not how insurance works. Not how it is supposed to work in a normal market anyhow. Insurance pools "like" risks. You do not put known high risks into the same pool as known low risks in order to make the known low risk people pay more. (At least not if you want known low risk people to buy insurance). You put all the known high risk people together and the known low risk people together, and you sell them policies at different prices. Older people are known higher risk.

No, that's how property-casualty insurance works, not life and health insurance.

For life insurance, a 90 year old guy with cancer doesn't subsidize a 21 year old with no health issues.

The actuarial pool is formed from people in all age groups. Your premiums will be influenced by when you signed up and how long you will be paying in. Continuity of coverage is not an issue with property-casualty insurance.

Health insurance has a one year term (at least right now), so it's based on how old you are, this year.
It owuld be nice if it worked so that the younger you signed up and stayed covered the lower your rates would be, but it doesn't.

So, here at my workplace, I, who am 63 years old, pay the same monthly amount (or the employer pays the same monthly amount) as a younger person. Is my employer actually paying more for me and I can't see it because we all get the same subsidy?

Pre-PPACA, I'm 98% sure your employees were broken out into bands, grouped into cohorts by age down to 5 years, with a fee for each. Your employer likely hides that because bosses are older and want that subsidy, too.

Companies with higher age and risk mixture will pay more in group healthcare premiums.
But yes, employer based plans are generally bad deals for younger workers, especially when you consider how much of the cost is paid by the employer. If young people saw the full cost of their employer-based plans up front, and could opt out in lieu of salary, employer based plans would face a death spiral. Many employers don't allow this because they are run by older people who benefit form screwing over young, naive, entry level workers.

Your are wrong for large employers who mostly self insure most employees and families, buying policies only for workers who travel widely or who are in remote areas.

ERISA has mandated since 1973 that insurance premiums be identical for all employees, except for relatively recent provisions to charge surcharges to smokers. Obamacare/Sibilus authorized rebates, awards, for doing virtuous things, like stop smoking, exercising, etc.

While most employers are not covered by ERISA, most States replicate it, and most employers and employment benefit managers (insurers) implement it that way.

Insurers providing benefits to small businesses compute a business rate based on the employee demographic and the work risk, so a 30 employee foundry gets a much higher per employee premium than a software house because it's workers are 30 years older on average and doing health degrading work. Unless there is competition which means a few small insurers are cherry picking only employers with healthy workers, who will insure the foundry workers but not the software company because a few employees have children with costly medical problems - ie it pays women well and gives them flexibility like working at home.

@Hazel Meade - but it is the way it works in the European countries that use private insurance to support their healthcare systems (Netherlands and Switzerland being the two best examples).

Curious, is there a good example of an existing or recent past healthcare system like what you're describing? How well does it/did it do?

Africa. Most of Asia. Somalia, Afghanistan, Yemen, Syria. No insurance. No government health care. Either you pay out of pocket, barter, or beg for charity care.

Only, conservatives never point Africa as examples of fantastic health care. Health care is very cheap in Africa. Why don't conservatives extolling the fantastic health care in Africa?

It boggles my mind why some people are so attached to employer-based health insurance. At least make it tax neutral to buy your own individual policy. Why are we compelling people to purchase the limited options that their employers make available?

I think a lot of people are deeply conservative about stuff that's working out okay for us. That's especially true in an area where we fear that the reformers aren't all that competent or all that well-intentioned. I think you can see some of this same reaction in the public discussion about vouchers, for the same reasons.

Right now, I have health insurance that works out okay for me--not perfectly, but I'm unlikely to be driven into bankruptcy by my medical problems (though I may be by an extended inability to go to work), I can see a doctor and get treated pretty easily, etc. Maybe the latest brainstorm from the reformers (right or left) will transform this into a system that works even better--doesn't have an endless cost spiral, covers poor people, doesn't chain people to their jobs. Or maybe they'll create an utter clusterfuck of a system that incidentally takes the working setup I have now and trashes it, and shoves me onto some shitty one-step-above-medicaid scheme. This actually happened to some people from Obamacare, so it's not like it's a crazy fantasy that it could happen under Obamacare II: The Revenge of the Death Spiral.

I want to see the reformed new system working on a small scale for a few years, without leading to fiscal disaster or driving all the local doctors out of business, before having the system I'm relying on in case I or my family get sick tinkered with--particularly when many previous attempts along these lines have gone very badly, and when the folks wanting to do the tinkering don't actually seem to know what they're doing or to have my best interests at heart.

Well said. Path dependence is a thing.

This actually happened to some people from Obamacare, so it’s not like it’s a crazy fantasy that it could happen under Obamacare II: The Revenge of the Death Spiral.

All the while insisting those people were stupid, were liars, or didn't count because there weren't millions of them.

This is not how you create trust in your health care reforms.

I agree with your larger point: the overall system we have is a mess. I wouldn't really mind something pretty close to the French model or the UK model, but getting there would involve people putting trust in it. One thing I've often asked for is that the government should set the laws such that it would be possible for a private insurer to set up one of those systems. HMOs used to provide it for a little bit, until we decided they could be sued for denying coverage, which a big part of how those European systems control cost.

So make such a system legal, and then let the wide-eyed do-gooder dreamers like me try to make it work in the private market. If we don't work, well, we haven't destroyed the rest of the system. If we do, then everyone who wants the system can just voluntarily join it, so mission accomplished.

No I think it's like withholding. Money you don't see is money you don't realize is actually yours. Do you have a general idea what your salary would be if you were getting cash instead of health benefits? Would you buy the same plan if you got cash instead of health benefits?

I think I saw a comment of yours in a previous thread where you said people think of employer-provided insurance (and other benefits) as if they are "free" add-ons, rather than part of a total compensation package that could shift towards higher salary if not for the health insurance component. I believe that is a big part of it.

Right. People have a hard time believing that if the health benefits went away, they would get paid more.

I'm one of those people. How are you so sure all that $ would go to the employees?

+1 - Yes, this is a significant factor.

Indeed, to such a large degree, that we have separate employer and employee payments to FICA. Furthermore, the majority of people don't understand that both parts effectively are paid by the employee. The genuinely think that half the FICA payment doesn't cost them anything.

Supply and demand. If the cost of employing workers suddenly dropped, employers would hire more. But then labor markets would be tighter, causing wages to rise. But if wages are still lower than previously (if they didn't rise to match the benefit loss), labor supply would drop and they would get even tighter. Millions of workers aren't going to be enticed to join the labor market after benefits are cut. In other words, the equilibrium has to be at the same point it was previously because supply and demand have not really changed.

Why would employers hire more workers? As you said supply and demand are the same, so the demand for labor is unchanged. The work is getting done already why hire more workers?

I'm not saying there would be no effect, but it reminds me of the border adjustment tax folks saying the dollar will certainly rise 20% to make the cost of imports stay the same. Will it?

"I’m one of those people. How are you so sure all that $ would go to the employees?"

If your employer could easily cut the total compensation they are paying, they would have already started hiring people at the lower rate.

I think some skepticism is warranted. In the long run, total after-tax compensation should end up about the same, except to the extent it is decreased because people with employer-provided insurance were effectively receiving a tax subsidy for that portion of their wages. So adding up the dollar value of total compensation and remaining benefits might lead to a lower number due to the loss of that tax subsidy. At the same time, if the compensation shifted to straight cash, the value of that compensation to the recipient might increase by as much, or more, than the lost subsidy.

However, in the shorter run there could be a lot of disruption, and much of that would be potentially unfavorable to workers. People are used to comparing jobs primarily based on salary/wage, with a more amorphous concept of "benefits" as "great" or "okay" or "bad." People who had been getting a salary of $50k with expensive health coverage might not be able to immediately negotiate a higher salary to make up for the loss of that coverage - people will still be in the frame of salary vs. salary, including recent vs. current salary. Other people are on negotiated agreements that may not end for a couple years, so if, say, employer-provided insurance became fully taxable like salary, it might take them years to shift away from health benefits towards salary.

Albatross is certainly right about people being conservative on the issue. As a public policy matter I think shifting away from employer-provided insurance would be an excellent move. But I have employer-provided insurance, so as a personal matter, I am worried about what exactly would happen in that scenario. The current system, terrible as it is, is providing me and my family with coverage, and I see the appeal of the known mediocrity to the completely unknown change.

@JWatts: but they cannot easily do this. Hence my question. If the employer no longer pays for benefits, they can easily hire labor for less. Not sure what mechanism gets all of that difference paid to employees. See TV's response.

The health insurance market is quite opaque. It is not at all hard to imagine ways I might find that somehow, in some way nobody can quite explain or justify, my salary has gone up by $5,000/year and my out-of-pocket health care costs have gone up by $10,000/year.

" Not sure what mechanism gets all of that difference paid to employees. See TV’s response."

Huh? The market is the mechanism. And Turkey Vulture says as much. I agree with him, that it's quite possible that a transition period could be bad, but that's an easy fix.

Assuming we are talking about the tax deduction for employer health care:
Just remove the employer tax deduction and allow a personal deduction for health care insurance.

Then for a period (maybe 8 years), make it mandatory that employers provide all existing employees either:

a) the same health care coverage, pass the additional cost to employees with a payroll deduction and then the employees can take the personal deduction. (This would be an identical deduction for anyone who has non-governmental supplied health care insurance)

Or b) If the employer drops health care insurance, they must add the cost savings to the employees before tax wages.

@JWatts: I agree that the mechanism is obvious when you mandate it by law. So yes let's do it your way.

"@JWatts: I agree that the mechanism is obvious when you mandate it by law. So yes let’s do it your way."

It's a temporary mandate that doesn't cost employers anymore money than they are currently spending. And it answers the obvious problems. I'm delighted you agree with the logic behind it.

Yes I know they are spending the same. My point is unless you force them to do so (spend the same amount) by law, many employers will use the opportunity to give the employees raises but less than what they save in healthcare costs. Why wouldn't they?

Why would employers hire more workers?

Are you serious? Do you think employers have maxed out and have all the employees they can possibly use? if the cost of employing people dropped by 20% you can get employers would find uses for a few extra people.

But again, those people aren't going to materialize from nowhere. We aren't talking about minimum wage workers. There's a roughly fixed supply of salaried professionals. At best, you might see a small drop in unemployment and slaries settle at slightly below the previous total compensation.

You're still increasing tax, though. The reason my employer offers me health-care benefits is because it is tax-free. If I am paid 70k, and my employer wants to give me a 10k raise, that will be taxed at 30%, effectively making my raise only $7,000. They can instead pump the full 10k into health insurance benefits, and cut out Uncle Sam. That's optimal.

Taxing the benefits would switch that back to $7,000, but I am WORSE off getting $7,000 in salary instead of $10,000 in benefits. Uncle Sam sure is better off, though, increasing his take from $0 to $3,000.

And premiums rise in accordance with supply/demand elasticity.

If you want sick old people to have coverage (as most of us do), and health care costs enormous amounts (as it does), you basically have to either:

a. Spend tax dollars on subsidizing sick old people.

b. Cross-subsidize sick old people by making healthy young people pay more.

The problem with (a) is that it involves raising taxes, and that tends to get you voted out of office (though Medicare is already doing (a) for the oldest/sickest demographic group). The problem with (b) is that if a healthy 20 year old is only allowed to buy insurance at rates that would cover the costs of a diabetic 60-year old smoker, he's liable to just go without it and take his chances.

An additional issue with (b.) is that the young healthy people have absolutely no guarantee that they will be cross-subsidized in the same way when they are 60, or even 40 or 30. They aren't buying the equivalent of a whole or term life policy. They are buying an annual plan, being forced to subsidize the older cohort, yet have no idea what the rules will be when they are looking to be subsidized. It would be a lot more palatable to be on one end of the cross-subsidy today if you had some promise that you would be on the other end in your old age. But there is no mechanism for such a promise in the current system.

TV, this is my concern. In my younger years I paid the full rates of my group plans. Now that I'm getting older it seems I was the fool for going along with that. Same concerns about programs like Social Security which I think may be even more important now due to lack of pensions that supported many in past generations.

The key question, is will young people, if given the opportunity, save enough to cover their own unsubsidized expenses for later in life? I think the answer is a flat out "no." Some say they can't save more because they're weighed down by subsidizing older generations, but my general expectation is that if that was removed, people would tend to save even more insufficiently than they do now. Investment advisors say most people spend more time planning their vacations than their retirements. Unsure of the best solution myself, but I can't waive away the behavioral concerns and impacts on society.

So I need to have my taxes raised because my college classmate ran up massive credit card debt to go on vacation in Greece instead of saving her dollars?

We need more Mr. Money Mustache....

Maybe we need more Mr. Money Moustache's, but we don't have them. Question is how to best work with what we have.

What about poor people who cannot afford *any* policy? Who pays for their health care?


They're paid for by those who pay for healthcare. At this point were just arguing about the path.

If the government stops paying for something through taxes, and instead demands that all the consumers of something pay for it, it's not really different from taxes, except that our feckless Congress can pretend they didn't raise taxes.

There is this thing called Medicaid.

I wonder how it would work to just make everyone eligible for medicaid. It's pretty crappy coverage, so most people would prefer to stick with their existing policy, but it would mean that even losing your job wouldn't leave you with no coverage at all.

This might also help eliminate the cross-subsidies between insured and uninsured people who show up at the ER--aka why an ER visit shows up as a several-thousand dollar bill, even if all you did was to wait three hours, see a doctor for five minutes, and get sent home with a prescription for some antibiotics.

Have public universal coverage over a high deductible financed by a sliding-scale fee: 12% on incomes up to a $ value maximum (which last would be adjusted annually per changes in nominal incomes). Have co-operative insurance through pools set up by trade unions, credit unions, and employee associations for which the premiums would be collected via employer withholding (the costs would not, however, be on the employer's books). This would also have a considerable deductible. Annual re-imbursements would equal the difference between the deductible of the public plan and the deductible on this co-operative plan. It would be financed by two sorts of premiums: a sliding scale fee on the wages of members of employee pools and a $ value charge to free agents who meet the criteria of the bond of association. Below the deductible, of the co-op plans, you'd pay out of pocket. Relatives and philanthropies could assist the impecunious with their expenses.

I was thinking of something like this. Catastrophic insurance (high deductible) plus create "pools" based on the SS#. Say, everyone with the last 4 digits of 1234 would be in one pool, etc. This would even out risk among the population. Then, for each pool have an "agent" that would be responsible for searching for affordable insurance for everyone in the pool. This would introduce competition. The insurance and the fees to the agent would be paid by the government. This would take care of major illnesses. People could still buy insurance to cover what is not already covered. There are still other questions, of course. How can we avoid graft? How would the agent be selected? What about those who could not afford the deductible? The devil's in the details.

The public universal coverage you describe could be achieved by simply nationalizing the bronze plan market. Republicans will never support such a thing, though.

Choice is fantastiic when all the options cost 10 times what I can afford.

How about save the economy a half a trillion dollars a year and go single payer instead? If the example of every other wealthy country is worth considering, it will also deliver better results.

Medicare is basically single-payer healthcare for old people (the group with by far the largest medical expenses), and we know how that works out in the US--people get treatment, and costs keep going up. (But I think Medicare does better than private insurance at containing costs....)

This is not relevant to any of these links, I'm just posting it here because if nothing else the comments section is good for economic rebuttals: I am fond of the idea that a "multiplier" rule for executive pay makes sense, i.e. "the highest-compensated employee in the company may not make more than c times as much as the lowest-compensated salaried employee in the company", where c is some agreed-upon constant. If I do believe that the market for CEOs is so illiquid and bad at measuring value that CEO pay is grossly overinflated, what are some arguments against this solution?

What problem are you trying to solve?

Big picture, income inequality. Smaller picture, CEOs are overpaid relative to the value provided because the market for CEOs is messed up.

Not arms length transactions.

Under this scheme, companies who insource vs outsource low-skill work have very different executive compensation options.

Whether the organization hires or contracts EVS isn't an obviously relevant factor in what CEO pay should be.

It's pretty obvious anyone proposing this scheme has never been involved in running any kind of business.

Indeed, I haven't. School me!

Start with "why should the CEO of [tech company] get paid more than the CEO of [janitor company]?"

Open a book and study previous attempts by outsiders to "fix the problem" of CEO pay. Observe that they backfired completely. Realize that you know much less than the previous outsiders. Stop messing around in other people's business.

@Daniel Weber: What is such a book that studies these previous attempts?

OK - maybe you make it a multiplier of median pay instead of minimum pay. I don't imagine the median pay at most large companies is a very high wage, but it seems harder to game the median pay in this way.

Company A employs a hundred thousand high-school graduates at 30k/year to manufacture something. Company B employs a few hundred programmers and testers at an average salary of 150k/year. Both companies are of comparable value and complexity to manage. But company A's CEO will be paid a fraction of what company B's CEO is paid.

I agree with you that CEOs probably are overpaid, but I don't think a simple formula works here, and as a law, it would probably have some ugly perverse incentives. (Like having company A outsource its production to some company in China, and employ a few hundred highly-paid manager types to oversee the process--instantly giving the CEO a huge raise.)

Good counterexample. Thanks.

I always figured a person's pay was directly affected by the consequences of making a bad decision. Hence, larger companies where a bad decisions might mean a loss of a billion dollars would pay the CEO more.

Progressive taxation is a simple answer, which is why it is a longstanding tradition. Countries vary in how aggressively they pursue it.

Peter Drucker favored a similar measure. In 1980, the highest paid CEO in the United States was a man named Robert Charpie, who had a compensation package worth $3.3 million annually, or shy of 200x of what nominal compensation per worker was at that time (when CEO pay in the U.S. was commonly many multiples of what it was in Japan and France). A 200x limit would cramp Jamie Dimon's style, to be sure. Mark Green suggested at the time a change in corporate law which would require that compensation committees be made up entirely of outside directors.

"Outside director" seems difficult to quantify and easy to fake. Is this true in practice, i.e. are outside directors actually "outside"?

Maybe a solution is recognizing public choice and legislating a requirement for corporations of some class to have annual shareholder votes on executive compensation?

CEOs are overpaid, but attempts by people who have never run a company to try and patch this just make things worse.

Shareholders cannot care less. NYSE:REG is at the bottom of the S&P 500. It has $600 million a year in revenue, on assets of $4.5 billion. Saving a few million on the CEO, when it just-might kinda sorta maybe who-knows? make no actual difference in performance? Not worth paying any attention to.

Which is why CEOs are overpaid.

Also, think of the skills that make you a reasonable candidate for the CEO of a big company--first-rate negotiation skills, amazing connections, politicking, structuring complex deals to come out as you want them to, etc. Now, think of the skills you'd need, as CEO, to get yourself a really nice compensation package. Note the overlap.

It would give them an incentive to focus on higher value activities that are worth paying people more money for.

If you're at the 200x limit, the only way to make more money is to increase the per worker productivity. Without giving them all a reason to quit and go to the competition.

incentive to focus on higher value activities that are worth paying people more money for

Shorter version: "fire the low-income workers." And then Nathan will be back in a year complaining how the low-income workers got fired. Even though it was the direct and predicted result of the policy he supported he will claim complete innocence.

If you spent half the energy running your own life that you do worrying about other people you could have your own Fortune 500 company by now.

Or subcontract out the low-wage workers. Most organizations have janitors and food service people and security guards and maintenance people. You can subcontract those functions out--sometimes that's a good business decision, sometimes not. But if the CEO's salary depends on the median salary in the business, then the CEO's going to have another reason to subcontract out the low-wage workers.

Alternatively, maybe the CEO decides to increase productivity for his workers. How can he do that? Oh yeah--he can increase the capital per worker, and use fewer workers to produce the same output. Again, the median salary will go up, but the results may or may not be good for the world as a whole.

2. This is about the intelligence bigwigs and their war on Trump, right?

Pretty dubious that the pundits first off the blocks are particularly insightful. Reading and analyzing legislation like this would take a long time -- not a few hours.

4. It's the financialization, stupid! Rodrik: "As Levitt nicely explains, after the 1980s this understanding [an international regime that would be hospitable to international trade among nations, but not so intrusive that it would undercut economic management domestically] was superseded by a new one that once again raised the market – and financial markets in particular – above the needs of society. Europe, America, and eventually most middle-income developing nations embraced financial globalization. Free flows of finance across borders, they were led to believe, would allocate savings and investment where they could be used most profitably. Domestic economic management became hostage to the whims of financial markets. Globalization became an end rather than a means." On the one hand, fiance is the fuel for economic growth; on the other hand, finance is like a flesh eating disease.

1. It's not a fair fight, but compare McArdle's dissembling with this analysis of the Republicans' HCP by Matt Yglesias:

It’s not a fair fight,

You fancy Megan McArdle has yet to live up to Yglesias level of sophistication?

Quick, somebody buy that Lady some Crayola crayons!

"Republicans are now paying the price for a years-long campaign of Obamacare lies"

It's not his worst piece since Matt does sort of squint curiously at conservative arguments, but he or his headline writer certainly lack a sense of irony.

• Presidential press conference, June 23, 2009. "If you like your plan and you like your doctor, you won't have to do a thing. You keep your plan. You keep your doctor."
• Rose Garden remarks, July 15, 2009. "If you like your doctor or health care provider, you can keep them. If you like your health care plan, you can keep that too."
• Remarks at a rally for New Jersey Gov. Jon Corzine, July 16, 2009: "if you've got health insurance, you like your doctor, you like your plan — you can keep your doctor, you can keep your plan. Nobody is talking about taking that away from you."
• Presidential weekly address, July 18, 2009: "Michelle and I don’t want anyone telling us who our family’s doctor should be – and no one should decide that for you either. Under our proposals, if you like your doctor, you keep your doctor. If you like your current insurance, you keep that insurance. Period, end of story."

This goes on for several pages. Trump is Obama's natural successor.

#1 - This slipshod plan suggests to me that the GOPe does not actually want the responsibility of governance, preferring instead to speechify to their consttituents about their principled losership and why they should be returned to D.C. to give more speeches, or bask in national media attention like Sens. McCain and Graham as "mavericks" or "the conscience of their party." I think it also reveals that the GOPe was caught flatfooted when Trump actually won.

Universal medical care at some standard level is getting fixed in people's minds as an idea whose time has come or is soon coming. And you can talk about free market economics and biological reality all you want but it's hard to argue that a polity with trillions in tax revenue is incapable of implementing something. Foreign aid is $42B/yr, so we can start there. The federal Department of Education is redundant of the State-level Departments and the local school boards and has a total budget of $215B so we can probably find some loose change there. The European armed forces don't actually do anything so I'm not sure why our armed forces bother with the place. That's got to be good for a niggardly couple of billion. (I can do a lot with a couple of billion).

Point being, with $4T being tossed around, the idea that we shouldn't divert a portion of it to providing a medical safety net just does not seem tenable.

I suspect if you want to make universal coverage sustainable, you're going to have to have the following features: 1) public financing is limiting to a fixed share of discoverable personal income and 2) high deductibles the norm, with first-dollar coverage unknown, and 3) revisions to state law which will require promulgation of prices.

The alternative is administrative rationing of medical care.

We have a medical safety net. The deductible is losing your job and all of your assets minus medicare eligible assets.

Understand why the fences are there before you take them down.

In this case, understand the benefit side of those issues.

As an extremely large number of generals and admirals have already stated, in a signed letter to the president, cuts at the State Department and Foreign Aid do not save money because more bulletes have to be bought.

Also, it's not dumb to support capacity building of long-term partners.

B.T.W., the EU just got almost full market access to almost all of Africa, which is almost certain to be the major growth market of the 21st century. And the US is busy pulling up the drawbridges (maybe, but probably not actually, but maybe a little).

Essentially the new plan is what Ryan has been proposing for years.

It sets up an interesting battle for the soul of the republican party between the Ryan-like true believers
and Trump who actually want to help the middle class but has no idea how to do it.

Good grief. The Guardian carries a lengthy and entertaining article about the moles in the White House, CIA, etc, and nobody notices that that is the topic.

Good grief, indeed.

Prof. Cowen forgot to call it self-recommending.

"There is no sensible thing that you can do to our health-care system that will not offend huge numbers of voters. Thus we got Obamacare, a program which, to a first approximation, 0 percent of Democratic policy analysts would have put forward if asked to design a rational program to extend coverage and improve health-care delivery. It was a gigantic Rube Goldberg contraption, deliberately complicated and opaque to avoid openly angering any important constituency, and arguably, fatally flawed for that same reason."

Or perhaps this is why it works. People want to see coverage expanded and have options for coverage should they lose their job or decide to become a 'gig worker' or whatnot. The ACA's logic was the US is a huge country running several major healthcare systems. There's at least two single payer systems (Medicare and Medicaid). A system of subsidies to employers to pay for health care directly (using insurance companies more as administrators to process the claims and negotiate with doctors/hospitals). And a small number of people who buy coverage directly from insurance companies.

An ideological 'rational' approach would upset the apple cart tossing millions of people in one system into a radically different one (i.e. abolish private insurance and put everyone in medicare....or voucherize everything and make people buy insurance directly). Instead the ACA said simply what system are people closest too? Nudge them towards that system instead. Yes that makes for a very long, complicated bill with all types of provisions but in terms of the average person it makes for the least disruption.

You are way too rational and factual on this topic for this crowd.

I don't disagree with Boontons's post. Guess that makes me super-rational. The Democrats lied about ACA and I guess that makes me a racist, sexist, neo-nazi. REEEEEEEE

#2 Moles. If anybody is having problems with moles, I recommend the Wire Tek mole elimnator traps. Beware imitators. The Wire Tek brand ones work well. I tried some knock-offs by mistake and they don't work as well. Wire Tek is the original builder of this trap, happen to be US made, and in this particular case it makes a difference. While not killing immediately, they do seem to kill rapidly.

1. It seems to me that the future is skinny universal health insurance that covers basic stuff, with a private market on top for those interested. The only question is how to get there from here.

Canada and the UK are, I think, heading toward this solution from the other direction.

And when a muslim transman of color is dying for lack of a highly limited treatment worth 8 figures?

Wow, great point. I hadn't thought of that. Keep up the excellent work, Thomas.

#3 was an interesting read, and I think Tyler identified the more interesting angle with his headline (the electricity cost of Bitcoin, rather than the 'sustainability' of Bitcoin). When I read about Bitcoin miners in the past, I pictured individuals with high-end desktops running a program in the background. I didn't realize they were massive, specialized datacenter-sized operations! Anyway, the article seems to compare the average cost of a Bitcoin transaction to the marginal cost of a Visa transaction, which is disingenuous and massively exaggerates the relative inefficiency of Bitcoin versus credit card processing. I'm also curious what alternative they would propose that would both verify the ledger and steadily expand the money supply. Mining does more than merely create new Bitcoins.

Yes, interesting, but I notice the authors used as a baseline 1.2 KW/household for energy power consumption, which is a bit low. Usually it's about three times this number, since you have to account for peak power. But in the Developing World you can get away with 1kW/household for electricity power consumption. But not for the USA. I've even seen figures as high as 6 KW/household for the USA (peak power is the culprit; nobody uses electricity in 3 AM, but you can't store it in batteries).

The part that really dooms Bitcoin cost wise is not how expensive it is to mine a block, but how few transactions happen in a block, especially when they are very fragmented: In practice, Bitcoin's maximum throughput, given the way it's written today is about 7 transactions per second. Even raising that by two orders of magnitude would make it too weak to run PayPal.

While pro bitcoin circles will not tell you much about this, analyzing Bitcoin as a distributed system shows that the sacrifices it makes for consistency make it useless for high volumes. People that do real work in distributed systems just laugh when reading about blockchains. Its performance only improves somewhat with colocation, and as mining gets centralized, its safety decreases, as suddenly two big miners can group together and do 51% attacks.

There's just enough bitcoin investors out there that the market will not completely collapse, as making BTC grow big enough that the problems become evident is not in anyone's best interest, but mathematically and computationally speaking, it's just a gigantic waste.

Thanks for the informative response--always appreciated! That's a good point about Bitcoin investors keeping the currency from total collapse, which isn't something I'd want in a currency. It seems the more I learn about Bitcoin (often from its proponents) the more it seems to have features that are not desirable in a currency.


The risk of a 51% attack is merely theoretical. The incentives aren't really there: the firm carrying out the attack needs a way to profit before the value of the coin goes to zero in reaction to the attack itself, and to get away with it. This needs to be more profitable than just continuing to mine and process transactions. HSBC could just decide to close and keep my deposits but nobody thinks this will happen. Inflation and confiscatory taxes on the other hand...

As for transaction frequency there are several routes for handling this problem as the demand ramps up. The low tech historical route is local currencies, fully redeemable. We can probably do better than that--but it's already much better than what we have now.

Why couldn't a hostile party do the 51% attack simply to mess up Bitcoin, not wanting to profit directly from the takeover, but from enjoying/profiting from Bitcoin's destruction?

The thing to understand about Bitcoin is that the crypto is pretty boring standard stuff, but the incentive design is incredibly clever.

An attacker with enough resources could wreck Bitcoin by buying mining hardware till they had more than 51% of resources, and then repeatedly messing up the consensus system and causing people to lose money. But the first step in that process is to buy millions of dollars of mining hardware. At that point, you also have a substantial investment that is valuable for basically nothing in the world except Bitcoin mining. So you can do the attack, but only if you're willing to lose your initial investment.

That's still possible--there are organizations with deep pockets and a potential incentive to get rid of Bitcoin. But you have to be willing to burn a bunch of resources on the attack.

Has anyone ever looked through the Random Critical Analysis blogpost of US health care spending? The author examines the income elasticity of health care expenditures and finds that America's high costs are largely driven by our high material standard of living. We're choosing to buy shiny new health care machines and unnecessary surgeries because we are rich and can afford it. Once other countries become as rich as us, they too will splurge on overpriced medical services.

#2 Those Moles are fascinating creatures. Their favored meal was not prevalent in North America until the discovery of the Americas by Europeans. I wonder if the Europeans brought the Mole too? Such a flux we live in.

#1 Medicine and health care, unlimited demand and limited supply. How does a Capitalist address that? Competition . . .

#5 Jefferson's was a utopian dream, he didn't believe in Government Bonds.

#addendum, As much as i admire him, and glad to have him on the nickel.

#3 The author of the article is simply a shrill for the fiat money authorities who rob the value of your money through quantitative easing. Rather than highlighting the amount of energy consumed the real factors are the electricity cost (as identified by TC), where the electricity is consumed and how the electricity is generated (more or less the carbon footprint).

The bias is immediately obvious when the electricity prices for the homes are usually more than USD$0.20/kwh, the costs for bitcoins are around USD$0.05/kwh. While the credit card processing centers are in cities, the bitcoin miners are usually in remote areas next to the electricity generators so remote that only a small fraction of potential output can be transmitted because of the limited infrastructures. The generation methods tend to be hydro, wind or geothermal that the marginal cost for production is small and the excess power wont be tapped if the demands are not there. Negating the transmission costs, no thermal power stations can compete with these. If there are no additional demands no extra powers are generated. For the hydro power plants the water is simply released, the wind turbines are simply locked down and the additional geothermal generators shut down.

An example of the location of a bitcoin mine, .

In contrast, the credit card processing centers in the cities are usually powered by dirty electricity from thermal plants close to the population centers (so as to reduce transmission costs) causing problems of pollution for the cities.

So what do you prefer, 1 unit of dirty electricity generated in your vacinity and robbing you all the time, or 5000 units of clean excess renewable energy at sources away from the cities? If it is excess renewable energy does the amount matter?

It's still a lot of wasted resources. We'd be better off if we could find some better way to come to agreement about the current state of the chain than how much work was done. That's true even if spending lots of resources on electricity for proofs of work is a better deal than putting a rent-extracting duopoly in control of the payment system.

What about ONE single payer system where each income bracket higher, you get a 1% additional chance of being bumped up one place in line?

Say, 0-50k annual, 50k-250k annual, 250k-10M annual, and 10M+ annual.

So, then, the person in front of you in line, just as they are about to be served, a computer can calcluate that 1%, 2%, 3% or 4% probability of jumping ahead in line.


"Troll Me", with all due respect, your thinking with Math/econ/equilibriumosis. Read the first three chapters of Ludwig von Mises -- Human Action.

Well, individuals know their own interest best. Except for when they don't.

I do think the question of which pie is larger should at least be on the table, although certainly I'm willing to trade more than a sliver of pie for some freedom. But the freedom to chose things I cannot afford just ... for some reason ... ain't worth squat to me.

to trade you have to have value. you can't trade a sliver of the pie, if your efforts don't mean sh|at to anybody else, however much that might offend you, consider the chips given to you in this game, you do what you do with them, if that doesn't satisfy you, on this garden of eden, out in the middle of nowhere -- then you are of the complaining pie.

Well, as long as you're allowed to backstab someone and take their piece of pie while you're at it, with a pat on the back to boot, then it sounds like it'll lead to some totally fantastic things!

Never mind the fact that the system adds up to better results for less money.

But anyways, since it pains you so much to see anyone ever receive any help ever, why not just go right ahead and support policy proposals that achieve worse results at a cost of a hundreds of billions annually to the economy?

People tend to be somewhat risk averse. This means that risk pooling can lead to much better results. Public health insurance is an example of this. Ideological obstinacy and legal corruption by health sector interest groups combine to hundreds of billions of dollars a year of waste in the USA.

But go on. Tell us how good it feels to kick a man who is down. You are that superior. You couldn't even throw him a crumb if it were to save you a loaf.

How about a single-payer system that works like Medicare, plus leaving a free market for insurance companies and medical providers. Spend your own money on supplementary insurance if you like, and go to a gleaming private hospital instead of a run-down public one, and you wait two days instead of two weeks for an MRI. No problem.

1. Accurate as usual.

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