Can we spend another $52 trillion without raising middle class taxes?

The question seems like a joke, right?  Yet because so much of our elite media class wants Elizabeth Warren to win, they are contorting themselves into every possible direction to make this one sound coherent.  It is not a question of whether total nominal expenditures on health care go up or down, but rather of thinking through incidence and opportunity cost and where the real burdens of the plan will fall.  Those are the core themes of my Bloomberg column, here is one excerpt:

Another part of the plan is to pay lower prices — 70% lower — for branded prescription drugs. That is supposed to save about $1.7 trillion, but again focus on which opportunities are lost. Lower drug prices will mean fewer new drugs are developed. There is good evidence that pharmaceuticals are among the most cost-effective ways of saving human lives, so the resulting higher mortality and illness might be especially severe.

And the close:

Warren’s proposals, when all is said and done, are best viewed not as a way of paying for her program but as a series of admissions about just how expensive it would be. Whether or not you call those taxes, they are very real burdens — and many of them will end up falling on the middle class.

By the way, here is a good NYT summary of Warren’s financing plan.  Here is a good Maxim Jacobs tweet:

It’s really hard to pick out which part of her plan is most insane?: – Lowering brand drug pricing by 70%? – CMS paying specialists less money – Taxing unrealized capital gains – Claim hiring more IRS agents will raise $2.3 trillion – “Not one penny in middle-class tax increases”

Here is more from Peter Suderman.

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--but what do Warren's friends at LTV Steel, Getty Oil, and Travelers Insurance think of her plan?

I think that Warren is very smart to continue to propose this. There is certainly a large percentage of the voters who will vote for free stuff. AND as long as the media focuses on this crazy plan they won't pay attention to how shallow and ignorant Warren actually is.

It is not free stuff. It is woke math.

https://medium.com/q-e-d/math-was-never-neutral-173b52e9bf4a

1 + 1 = whatever I say it is and if you disagree you are a racist, homophobic bigot or something.

American exceptionalism means certain Americans are exceptional at not understanding out how the other countries are able to manage public healthcare. Singapore, Switzerland, Canada, UK, France, Germany, Australia, Scandinavia. But not America. That is exceptional indeed.

Where do Canadians go for quick and good healthcare??? America.
Which country has the best health care??? America.

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My favorite thing about words is how cheap they are. A $52 trillion here. A $52 trillion there. So cheap to just make up numbers. Make them up as we go along! Tra La La La La!

I have a better plan. Mine will cost $57 trillion dollars but - and here's the kicker - it will be 5% better than Warren's plan. Trust me. I've got this.

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I don't feel terribly animated by this question. And Noah Smith did allay my worst fears. A little dueling Bloomberg action there. Still.

What really matters is the opportunity cost of policy choices, in terms of foregone goods and services — not whether the money can be raised to pay for a chosen policy.

I think this must be a Straussian pro-Warren message. Because (1) opportunity costs are the last argument to make, and (2) "foregone goods and services" are exactly what we need to contain costs.

It's a common argument against government health care, along the Canadian model etc, that under US insurance "I can see my doctor when I want, I can see a specialist when I want, I can get an MRI when I want, I don't have to wait."

But those "wants" are often dumb, expensive, and unnecessary.

To contain costs it is necessary to "ration" unnecessary care.

> But those "wants" are often dumb, expensive, and unnecessary.

But a third-party payer system (like medicare) is exactly the kind of system that shifts the incentive such that a person 'might as well' get an MRI when they (and their doctor) know they don't need one.

> To contain costs it is necessary to "ration" unnecessary care.

Or just allow totally normal incentives to work as they ought to, motivating consumers to be discriminating in their approach to purchasing healthcare?

You'd have a good argument, if the lines on Noah's chart were reversed.

By your logic, they should be. Right?

Maybe, if we didn't have a government-created employer provided healthcare paradigm, coupled with a narrow limitation on the organization of health plans.

If you mandate that there is out of pocket maximum, mandate minimum coverage, mandate people buy this product, and then induce employers to cover most of the costs by diverting wages into this health plan, then you have a private insurance market with the exact same problems.

Instead, chart procedures that are elective and paid out of pocket, and you might see a different trendline.

Another point is that the government already forces providers to sell for a loss. Should you be surprised that private insurance, then, pays more to make up the difference?

I don't think anyone who really understands the status quo, even the pre-Obama status quo, really likes it(*). That's our common ground.

The choice seems to be (1) try something unique in the world, an unregulated insurance and medical market, or (2) adopt something like one of the successful national health systems in the world.

I'm down for 2. It seems more practical and proven and less ideologically based to me.

* - Though Tyler kinds of argues for the "experience" benefits of buying something called "insurance" and getting "health care" independent of results. If people buy it, that justifies the product.

But Medicare for all is *also* unique in the world, especially as proposed by Bernie and Warren. The most similar system is South Korea, with the notable difference being that in South Korea supplemental private health insurance is permitted.

Under the Bernie and Warren plans, that's prohibited. Moreover supposing it were permitted, it raises the question: why mandate participation in nationalized comprehensive insurance scheme if it is insufficient? In South Korea, the majority still purchase supplemental insurance.

The proposed system is unlike Germany's, which has subsidized 'statutory' health insurance offered by competing firms as well an opt-out private insurance system.

It is unlike the NHS, which is a nationalized healthcare provider.

There are actually many different constellations of government controlled healthcare in the world, and the present system in the US numbers among them. Why, when the present government-controlled system fails, is it reasonable to conclude that it's simply a matter of implementing a different government-controlled system?

As for claiming that a free-er market approach is without precedent, I'd point out that Singappore is pretty close to a system with minimal government control. Additionally, the US once had such a system, and the US does have such systems for the overwhelming majority of goods. I have yet to hear a good, compelling explanation why healthcare goods are so different from other goods that they can't be provided by a market.

I say I'm not too animated by this question above. That's because "medicare for all" does mean so many different things to different people right now, and because I see basically none of them passing Congress.

Now, Singapore does sound interesting, but I'm afraid it fails the second test as well.

Healthcare in Singapore is supervised by the Ministry of Health of the Singapore Government. It largely consists of a government-run universal healthcare system with a significant private healthcare sector. In addition, financing of healthcare costs is done through a mixture of direct government subsidies, compulsory savings, national healthcare insurance, and cost sharing.

Could you see our Congress passing a largely government-run universal healthcare system? With actual government hospitals? With a mixture of direct government subsidies, compulsory savings, national healthcare insurance, and cost sharing?

Don’t be so coy anonymous. M4A means the same to all of us. We will use the powers of government to rid ourselves of the useless insurance companies. Then we will crush the greedy pharmaceutical companies who for far too long have free-rides on our government supported drug research to enrich themselves.
Our doctors and nurses will finally be freed from the endless paperwork of the for-profit insurance model. No longer will they have to worry about profitability for we will have endless financial support for whatever treatments they want to provide and their customers want.

Once we have cast off the shackles hoisted upon us by the 1% we will be free to live our lives as intended.

#Viva la revolution
#Medicare4ImmigrantsFirst-RepublicansNever

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What model is that we should adopt?

There is the British NHS, which is not terribly dissimilar from TriCare.

We could opt for the German model, where profit is limited and everyone is covered but does face restrictions on providers. We do this at the VA.

Or we could go with the Japanese model where everyone pays in taxes and then is free to choose providers while picking up a high percentage of the tab themselves. This is not dissimilar to Medicare.

The funny thing is, none of these systems actually has a cost advantage in the US. All of them have different trade offs and none of them have been substantially cheaper at delivering the same care.

And I could go on. Mayo, Microsoft, HCA, CVS-CareMark, Cigna ... we have lots of organizations with more people under their wings than whole countries. All of them try different approaches to deliver healthcare. None of them, literally zero, have cost profiles that look remotely like the rest of the world.

So do tell, what is the magic sauce that everybody from TriCare to Anthem to MediShare gets wrong leading to higher costs?

The funny thing is all these systems have considerable cost savings over the US system, as we pay 30 - 50% higher amounts (in GDP terms) than these countries for worse care that doesn't even cover everyone. Any of the systems in use in G7 countries would be a huge improvement.

Why do you assume that spending and arbitrary "outcome" metrics fully describe the system? Free choice is important. We could have considerable cost savings in the smart phone industry by imposing government rules and restricting choice. I could even probably come up with hard to argue metrics about useful information transmitted and so on. Would you actually support such restrictions on the grounds of spending and outcomes? If people want to spend their money on health care for things that are of questionable benefit, so what? You can judge much of what people spend their money on, in all areas, and call it waste. Of course spending can be lowered by rationing.

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This topic is more complex than can be explained in an internet comment. But to simplify dramatically..

If all procedures were reimbursed at Medicare rates a very large percentage of providers and hospitals would be bankrupt within 6 months. It would never cover the fixed costs.

Hospitals are the easier example here because they have very high fixed costs for very obvious reasons.

Let’s say without Medicare only 80% of the beds would be filled. Since Medicare pays over the variable cost, the Hospital will take Medicare patients to fill that 20%. However, if all beds were Medicare, they wouldn’t cover the average cost because the higher insurance payout is used to cover the fixed costs.

Make sense ?

It's kind of important what those empty beds represent. Do they correspond to meaningful life extension or quality of life improvement?

I just dropped a link to one of those country comparisons, expenditures vs life expectancy.

Would you say "oh no, all those countries with higher life expectancy and lower costs aren't filling enough beds?"

I’m sorry I don’t understand how your response is relevant to the underlying variable and fixed costs issue whatsoever.

Medicare rates do not cover fixed costs. Period.

Because they don’t cover fixed costs, Medicare payments are always less than Average cost.

Understand?

I love that. You ignore the link comparing countries costs and results, you ignore that "bed filling" is not the goal of any rational health care system, and you hit me with one final "Understand?"

Oh, I understand.

Do you though? You haven’t addressed the underlying issue at all....

You’re making off topic tangential points that have nothing to do with hospital finances.

Medicare rates do not cover the fixed costs of operating hospitals. They cover the variable costs, which means it makes financial sense for hospitals to accept Medicare patients.

The fixed costs here is overwhelmingly labor.

I don’t see how anything you’ve said changes the math. If you’re advocating for plummeting nurse to patient ratios and cutting staff salaries to be in line with other countries then sure. That’s where the savings is.

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If your argument is that we could have cheaper healthcare by delaying healthcare as happens in Canada, then let's have that argument.

How many months should I have a patient who has limited ability to ambulate wait for a joint replacement? In the US knees get replaced in three weeks after the call is made for medical requirement. In Canada, the wait is eight weeks. Each week patients ambulate less their risk of PE goes up, so how many dead seniors should we let fall out of the statistics to pay for the difference?

Beyond that how much morbidity should patients have to live with? If we forgo "elective" hernia repair we are not just increasing, marginally, the number of patients who get incarcerated or strangulated bowels, but we are also increasing the number of people who cannot pick up their grandchildren or need help with their groceries. When you restrict access what you really are doing is making people live longer with morbidity.

And this true regardless of which system you use. But there is no pot of gold. We could certainly cut costs by telling people to suck it up, but we are not having that conversation. Instead we are being told that a large pot of gold is sitting in the middle of US healthcare that some sort of mumbo jumbo about who signs the checks will unlock and we will get cheaper healthcare without other sacrifices.

8 weeks fora knee replacement? Canadians would love to wait only 8 weeks for a knee replacement. The average wait time for a knee replacement in Canada is currently 41 weeks. In some provinces it is measured in years. And even to get to the point where you are on a waiting list means you've probably already spent months on waiting lists to see the specialists who can get you on the knee replacement list.

My grandmother was barely mobile because of her knee. Every step was painful. Her quality of life was severely impacted. Her wait for a knee in Saskatchewan? Several years. Three or four, if I recall correctly.

My wife needs to see a specialist. She went to her GP in September to get a referral. Her specialist appointment is in March. That's the earliest they could find.

Waiting lists in Canada are absolutely terrible in some places. Especially for non-life threatening 'quality of life' treatments. Canada has very good statistics for things like breast cancer and natal care. These are highly visible, politically charged, and internationally tracked statistics. The bureaucracy knows which stats matter politically and which don't, and they focus their resources on those areas.

Canada's health care is also very good in specific areas where the rich and powerful and influential live. Major metro hospitals can be world-class - especially in Ottawa, Toronto, Vancouver, Edmonton and other large cities. But if you are a rural farmer and need treatment, it's a complete crap-shoot. Rural doctors are often terrible because we don't pay them enough, so we bring in lots of doctors from places like South Africa, and don't look too carefully at their history.

There might be a lesson there for Elizabeth Warren and her plan to save money by simply cutting the income of health care professionals.

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Why is everyone so concerned with how much we spend on healthcare? Are similar yardsticks applied to food and "food outcomes" or smart phones and calls completed or cat videos downloaded? If people want to spend their last dime extending their life by a few days, or get tests for problems they are unlikely to have, that's their business as far as I'm concerned. The freer the market, the more people will personally feel the cost of these decisions, which is the real requirement to make things efficient.

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"Lower drug prices will mean fewer new drugs are developed."

I thought public funding was largely responsible for basic discovery in drug research. Drug companies only do late-stage research, which I believe is the cheaper end of drug research.

I'm not saying there would be no impact in development and output under a Warren. But I wonder how big the impact and how easy it would be to address.

Re: "I thought public funding was largely responsible for basic discovery in drug research. Drug companies only do late-stage research, which I believe is the cheaper end of drug research."

You are correct, sir.

If by "correct" you mean clueless, then yes.

Basic science is cheap. Typically it starts in cell cultures which are cheap and mass produced (maybe a few hundred bucks). Your workforce consists of a graduate students (dirt cheap) and post-docs (cheap). Your synthesis reactions can be done in standard lab glassware and you can accept multiple rounds of reaction and purification (cheap) and can be inconsistent (you just throw out the bad batch and try again).

Late stage your subjects are humans (very expensive) and your workforce consists of nurses (expensive), chemical engineers (more expensive), and physicians (possibly 1%ers). Your chemicals must not just be pure, but must be continuously proven to be such. Your synthesis reactions must be pure and consistent. They also need to be high throughput with product in a form that is shelf-stable, bioavailable, and preferably palatable. And then there are the lawyers (definitely 1%ing) and compliance paperwork.

Phase 1 trials cost a few million per, these are early trials (still conducted by drug companies) which only establish safety.
Phase 2 trials cost a few tens of million per. These establish some degree of efficacy.
Phase 3 trial costs several tens of million per and can rise to significant fractions of a billion. These are the late trials.

Out the door, total cost of clinical trials are over $100 mil for a lot of areas, and all of them are rising.

Looking from the other end. Total R&D for big pharma was $71.4 billion in 2017. The NIH budget was $31.3 billion of which ~55% went to science grants. This is further dropped because a lot of NIH budget goes towards things that are neither basic science nor drug R&D (e.g. epidemiology).

The easiest and cheapest part of the drug discovery process is the early stuff. Pharma employs many people whose sole job it is to kill drugs early in the process before they rack up significant costs. Most potential drugs never see the light of even a single clinical trial not because they failed or were proven unsafe, but rather because their odds of success fell below a level that made it reasonable that they would work.

Basic science already churns out far more potential drugs than we could ever hope to test in late-stage research.

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I don't think that's the case. There are plenty of cheap biotech stocks to gamble on, companies who's only promise is a pipeline of a few drugs that they work on from discovery to therapeutic application.

Here's one, for example.

https://www.gtbiopharma.com/product-pipeline/overview

All of those biotech companies exist because there is a chance that a drug firm will buy them or their drug for billions. If many of the billions go away, there will be a lot fewer VC firms funding biotech startups, and thus fewer scientists trying new drugs. It's always been the big drug firm profits that fund the biotech startup industry.

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Did Tyler just cast aspersions on warren’s plan? So much for his dreams of being accepted by the media and joining in on their dinner parties. He may even get pies in the face or be accosted.

"You don't understand!" wailed Tyler "It was a Straussian reflection! A Straussian!".

The Inquisitor for Academic Truth and Reparations looked grimly down over her glasses. The Future-Convicted person before her had some tenured standing, but he was ageing white male without serious record of publication in promoting diversity or access. Economics was a constant source of irritation to her; the heteronormative discourse of "supply and demand" had been overturned by Modern Monetary Theory and the genius of President Sanders, of course, but patriarchal holdouts like this one continue to proliferate through the system.

"It's not my fault," whimpered the accused, nursing his hand where the guards had struck the graph paper away. "Most of my readership are libertarians, or even Trump voters. That's practically unreconstructed fascists - I have to give them red meat or they'll be off to Breitbart!"

Enough was enough, using such language in court! She gestured for the red-clad deputies to take him back to the holding cell to await judgement. As he was dragged across the floor he fell to cackling, in a throaty, half-sob, fashion "Tyrone said there would be trouble! Nobody likes Tyrone! Tyrone brings new master tasty data and nasty master beats Tyrone! Where's my budget, Precious? Precious? "

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What a joke of a post. America already spends trillions without raising middle class taxes. In fact taxes get cut. This is partisan back shill nonsense.

May as well tack another $52 trillion onto that national debt, right? What could go wrong?

I don't think that word "another" should really be in the title.

Warren bases her plan off of a recent analysis from the Urban Institute, which estimated that under current law, Americans would spend $52 trillion over the next decade on health care — that includes many types of spending, from employers, individuals and all levels of government.

In that analysis, the Urban Institute calculated that under a single-payer plan that looks a lot like Medicare for All, costs would total $59 trillion over a decade, which would require $34 trillion in new federal spending.

Warren's plan estimates that total health costs could be held to $52 trillion and that $20.5 trillion in new federal spending would be necessary.

Here's How Warren Finds $20.5 Trillion To Pay For 'Medicare For All'

It makes me feel a lot better that we only have to pony up $20.5 trillion.

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Plus, why shouldn't "another" be in the title? After all, as Benny notes, we've made it this far without raising middle class taxes by relying on the national ATM. Why does it matter if we add any number of trillions into the debt black hole? Why are we even paying any taxes at all, if we finance debt so easily?

Exactly. Trillion dollars deficit up 26% where is Tyler's hand wringing? Probably up his butthole knowing him

https://www.usatoday.com/story/money/2019/10/25/rising-national-debt-2019-us-budget-deficit-nearly-1-trillion/2458452001/

No need for the homophobic attack on Tyler. Our side doesn’t need to resort to bigoted remarks like the Magats. We have reality and truth, they only have lies and deception.

Fuck off. Tyler loves to play his shitty little games where he pretends to be impartial and calls people mood affiliation which is some ad hominem he invented and all the while is a muck racking shill. But then I get to call him out on it and also call him an asshole fiddler and I know he reads the comments. The old dotard knows I'm right deep down but is too far up his own sphincter to admit it.

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Proposals such as Warren's are why the r-strategists of the left must be dealt with post-haste. They really do not have any ability to grasp the concept of scarcity, and they are perfectly willing to bleed the rest of us dry in their quixotic pursuit of free resources.

That's silly "free resources"-- Skilled labor is a skill it must be fostered-- it is not free but a cost.

Speaking of, if everyone has a right to free health care, doesn't that make the providers and financiers of that health care slaves?

No. Next question...

Next question, if you were to find yourself stranded on a deserted island, how do you exercise your right to free health care? Who in this scenario is depriving you of your rights?

Funny, I've used the same analogy for years and nobody seems to get it.

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When Warren fell into Trump's Pocahontas trap and had that DNA test, I knew then if I didn't know it before that she is not the sharpest knife in the drawer. No challenge, no matter how trivial, isn't worth a response to prove that she is worthy. No public policy issue isn't worth a detailed plan to prove that she is worthy. Warren is defining women in politics down, and may set back women in national politics for decades if she is the nominee. The hope is that the Democrats will come to their senses. Chauncey Gardiner could beat Trump next year, but not Warren.

"...and may set back women in national politics for decades if she is the nominee."

In only my most fevered wet dreams would I hope so. But I'm not so sure. So many other women are responding to her smoke signals. She make big fire in big wigwam USA, bring in other squaws from other tribes from miles around wear pussy hats make big show for sun dance 2020.

Signs don't show good hunting for next several decades. Must be white-eyes fault.

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"Warren... may set back women in national politics for decades if she is the nominee."

I fear you may have set back the reputation of lawyers back by decades with this hyperbole.

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Chauncey has had his two terms and would prefer to lounge around Martha's Vinyard, so I think we're safe for now.

Ad for Warren, she's her own person and you should not judge all women by her. On the Dem side, Gabbard is the only sane person they have as a candidate. Any for the Reps, Nikki Haley is my choice for the future. That would be a matchup that represents both sides well, and would give us faith in a choice between two competent leaders.

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Not Trump. Warren laid her own trap tears ago when she tried to claim native privileges. She also had ample opportunity, several decades even, to apologize and say it was a mistake based on family gossip. She doubled down.

At least she wasn’t lying when she said her teaching wasn’t renewed because she was pregnant.

Except ... she was lying. It’s okay though because ... YOU SEXIST! A man running for President would would never be called out for lying.

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WB--It's the opposite. The really expensive part of drug research is where you stick it into a large number of patients, who must be expensively dosed and monitored, then see what happens. The cheap part is the lone genius (or team of them, these days) in a lab.

This is 100% correct.

The pharma companies are the experts in shepherding drugs through the phase 1 - 4 clinical trials necessary to bring the drugs to market. That’s their main value add.

The research is trivial compared to the clinical trials process. It’s about $1 billion for phase 1-3, phase 4 lasts essentially indefinitely. And the success rate through phase 3 is about 70%.

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By that logic if we cut drug prices while at the same time making the approval process easier we'd save money at the expense of some increase and risk. That's a debate worth having, is it not?

Impossible.

What bureaucrat is going to be known as the person who allowed grandma to die so that “the drug companies could have lower costs”?

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McArdle may think she knows, but she doesn't. What we can expect from any new policy is the unexpected. Economists like all soothsayers are terrible at predictions, especially predictions of the future. In times past, soothsayers got their comeuppance for their wrongness, but since we don't do that anymore, economists keeping predicting, and reliably wrong.

Much better to follow the campaign promises of redistributionist politicians. As long as they tell me everything's going to be OK!

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rw, with all due respect, I don't think it's much of a stretch to think that if pharmaceutical industry revenues decline, pharmaceutical industry R&D spending is likely to decline, also. This isn't goat entrails we're trying to read here; it's a profit and loss statement.

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Referring to the chart at Noah's article, private insurance is actually happy to provide unnecessary care. You pay higher premiums. They take their cut. As do the doctors and hospitals. And those extra tests.
You might even think you are getting something for free, because "insurance is paying for it."

But is it really an "opportunity cost" to remove that weak "utility?" The "feeling" of getting health care?

The biggest savings will be when 1/3 of the doctors currently working stop.

Canada and the United States both have 2.6 doctors per thousand residents. But Canada has dramatically lower total system costs. How could that work?

Could it actually be that removing private insurance infrastructure reduces costs while keeping those doctors?

"Could it actually be that removing private insurance infrastructure reduces costs while keeping those doctors?

No, it's not the reason at all. In fact it would be nice if the United States actually had some type of private insurance infastrucure instead of state by state oligopolies. It would also be nice if hospitals in some states didn't have the power to block new entrants.

Right healthcare is a state issue because the states do most of the regulation. The more the Fed Gov pays for the less incentive the state regulators have to set rules with costs in mind.

>a href=https://un-thought.blogspot.com/2019/01/could-sending-money-to-state.html>One Idea I had was for the Federal Government to send all the money they would have spent on healthcare to the states and require that the state Government's cover the elderly and poor. The money would be sent on an age adjusted per capita basis.The state Governments would be allowed to spend the money as long as they choose cover those over 65 years old and the poor, as Medicare and Medicaid do today

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There's a middle class in the U.S.?

The U.S. is not some Latin American sh*thole like Brazil.

Brazil is actually one of the biggest economies mankind has ever seen. It invented the radio, the airplane, the typewriter, the Walkman and discored the pion and the Urca Effect.

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"What really matters is the opportunity cost of policy choices". That's something that's impossible to quantify, and it really should be the least of our worries.

The problem I see with Warren's plan isn't the numbers on the tax side but rather her ridiculously rosy estimates of future costs and usage of medical services. If her no-copay / no-deductible plan becomes reality, she sees only a modest increase in usage of medical services. Really?

Really? Yep. When the govt is paying, they get to say how much care you get.

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I guess it's far easier to visualize potential opportunity costs of changing current policies than to evaluate the (massive) opportunity costs of keeping current policies.

There must be some name for this kind of bias.

\> implying tyler is an advocate for status quo

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"Can we spent another $52 trillion without raising middle class taxes?"

"The question seems like a joke, right?"

Well, the typo for the verb does yield a Risibility Quotient all its own . . . . I was as struck by TC's earlier "attourney" headline slip which helps give courtroom contests even more entertainment appeal.

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And yet...SOME of her plan is right. The US has the highest health care cost in the world by some measures. We need analysts ready to separate the wheat from the chaff, not academic street gangs ready to pounce on the "other side" for the sake of ideological purity. What will bring those costs down?

There will be no "Marginal Revolution" in health care. It will take a comprehensive point of view. Let's have a more serious discussion.

Fair enough, but I'm not sure "just nationalize it," which is what her proposal amounts to, counts as a serious contribution to the discussion.

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Trump admin has a few ideas for lowering costs. We could wait a bit and see if they work before plumping for nationalization.

OK, I think I'm done, now we can talk. Oh wait, there's more! hahahahahahahahahahahahahahahahaha

Ok, what were you saying about the Trump admin?

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The US has the highest education costs in the world. Do we need to bring those costs down?

Yeah but it'll be easy. First we make college free. Then we raise teacher pay because it's unacceptable that teachers only make the median salary. Then we'll save a trillion dollars!

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US healthcare is driven by differences in wages, staffing, and disease survival times.

If there were a simple fix to find the pot of gold in US healthcare it would be done already. MD Anderson has one stop shopping for cancer with a fixed price. They are still more expensive than Sweden. Cleveland Clinic pays doctors salaries and is fully integrated. They are still more expensive than England. Kaiser has a huge population, a massive data analytics section, and is committed to managed care. They are still more expensive than Germany. The VA is government organization with a unique set of clients and massive economies of scale. They are still more expensive than Scotland. TriCare is a full Beveridge model with a population larger than Austria. They are still more expensive than Austria.

The US does not have a health care system. We have several. All of them have entities that are larger than entire small European countries. None of them are cheaper at providing healthcare than said small European countries.

I submit that the simplest explanation is that US healthcare is expensive irrespective and regardless of the system used to administer it. Mirroring also out educational system.

What is your simpler explanation?

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US hospitals billed 3.2 trillion in 2015 and receive ~ 890 billion leaving ~2.3 trillion of real medical services lost for our economy -- PER YEAR. Indignant patience are huge problem and not talked about-- you cannot have a free market for health care with Emergency room laws and 25% of the population only paying their bills.

If you want to fund a health care program-- don't do it through taxing but through new currency issued directly to us Hospitals. Real economic activity should be paid to the hospitals and doctors for the real work/ value they do.

All of your analysis is moronic because it ignores this basic fact. Especially given that the medical sectors is 17% of the entire GDP-- so getting this sector up and running in a sensible way will generate the most economics gains in the US.

Right now in the US we are swimming with rocks tied to us-- the US over the same 10 years right now will lose ~23 Trillion of real medical services over 10 years in the current system.

Y'all, are idiotic. Looking at taxes-- when BTW we have half the rate of doctors as most major countries. IMO Medicare for All is only a slight improvement-- but a very important step in the right direction.

Just FWI, calling people morons is not the most effective way to change minds. Your argument is interesting though. Right now we're effectively charging hospitals a massive tax to cover emergency services to people who can't pay, so it would be better to spread that tax out rather than discouraging people from opening hospitals. Do you have (post Obamacare) sources for this?

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I can't help but feel that people like Tyler aren't arguing in good faith.

In France most healthcare is paid for by the government out of general tax revenue. In Germany employers purchase insurance from a system of highly regulated non-profit sickness funds. I get that this in an important administrative detail. But Tyler seems to think there is some huge fundamental difference between your paystub saying:

Blue Cross - Employee - 122.53
Blue Cross - Employer - 337.21

and

Medicare for All - Employee - 122.53
Medicare for All - Employer - 337.21

The biggest difference is that when you buy the insurance you get service. You have no idea how badly government run care would be. Think Libya. That bad, and you have no recourse. None at all.

Why do you think it would be bad? Is Medicare bad? Most old folks seem to like it.

In the UK you can buy private American style coverage for an additional £1/ day. Only about 6% of UK residents bother to get it.

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"when you buy the insurance you get service"

No, you get bs like this:

How One Employer Stuck a New Mom With a $898,984 Bill for Her Premature Baby

Does that happen in Canada?

In a word, no.
We had a severely premature baby - 760grams - in Canada in 1982. She survived, is not disabled, graduated from college, etc. We had no co-pays or any other significant costs.
My Trump-loving brother, who lived in Florida, was very keen on Medicare. Which is close enough to the Canadian system. Except that virtually all specialists are part of the system in Canada, which I gather is not the case in the U.S.

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My grandma seems to love medicare.
My ex-gf loved having medicaid.
My military friends love their VA service.

Yet I feel constantly screwed over by my private insurance that takes my money every month and then tells me which doctors I can or can't see, or refuses to cover blood tests that my (in-network) doctor recommends. Or more fundamentally, the hassle of the private health insurance that changes every time I start a new job.

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There is a difference though. it is that an insurance premium is an incentive for a wife to work in the taxed economy a tax is a disincentive for a wife to work in the taxed economy. The taxed economy tends to be more productive that in home production for in family consumption.

But you can get some form of M4A with Gov. spending less than they spend now (although the AARP will try to destroy any politician who signs on to that), and you can get M4A and spend more than 2X what gov spends now. and anything in between.

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Two points: First, Warren, Sanders, Booker, Klobuchar, et. al. are sitting senators. They want to beef up IRS collection enforcement. If so, why haven’t them been clamoring for this outside of their grandiose plans?

Secondly, TC’s article ignores the additional trillions that Warren’s other plans (college debt forgiveness, destruction of the oil industry, covering all arable land with solar panels) will require. The brunt of all of this will fall on the lowest four quintiles. You must replace your automobile, perhaps you won’t be allowed one. You will pay for college for all. You will lose your job as a combustion engine mechanic or insurance industry employee. In its totality it is a terrifying prospect if enacted.

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"You will lose your job as a combustion engine mechanic or insurance industry employee."

But will my job as slave-whipper be safe? What about my brother's lamplighter job? Will Warren's plans kill my sister's job as switchboard operator?

You know what they say: you can teach your sister to operate a switchboard, and she can feed herself for life. But if you legislate away her job and put her on government benefits, she won't have any choice but to keep voting for you!

But do you think Warren's policies will impact adversely her job?

I guess you missed the "keep voting for you" part.

It's amusing how so many people believe that the medical industry is only out to profit and yet can't make the same assumption about the people seeking to remake it in their image.

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With little American oil production the oil industry will merely be dominated once again by foreign oil producers. Buy Aramco! (This assumes that people in states like PA with fracking will be foolish enough to vote for Sen. Pocahontas).

We can switch to renewable energy sources.

Only if the renewable energy is single payor. No benefits should be received by Republican Capitalist Pigs. They shall only bear the burden.

This is why I support the China model. The only drawback so far is that far to few people are being re-educated. And far too many people have access to fake news no matter how hard we try to block everything.

#standagainstHK

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No, the U.S. cannot (and should not try to) do so during the course of one or two presidential terms. The Green New Deal is a moronic pipe dream.

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I've never understood why candidates try to include these over-the-top budgets for their proposals. Why don't they just lie about them like Obama did with ACA?

Cute, but we don't yet live in an authoritarian state, one in which a President simply "enacts" his plan with a tweet. He must submit it to Congress, and then (he hopes) get something similar back again to sign.

If Warren were elected we'd see the same thing. Her plan would go through the Congressional mill, and come out the other side .. if at all .. looking much different. At that point people could fault Warren because "promises" weren't met. But that wouldn't really be what happened.

Maybe if you spent less time conversing with the enemy and more time GOTV we could remove the current occupier of the People’s House as well as his Russian Brethren in the Senate. Then the United States can follow the one party rule like our great state of California. We have shown the world the advances in equality we can make without the bother of dissension. That’s the democracy I crave.

#MakeElectionsIrrelevant

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I learned long ago in a few political science sources that themes win elections not detailed policy proposals. I think Warren is the wrong candidate at the wrong time. But I can't help but be amused by Cowen's sudden concern for "disruption", Cowen being the pied piper of "disruption". In this case Cowen is all aflutter about "disruption" because it would implement a policy he disdains. I happen to agree with Cowen on this particular policy proposal, but jeepers!

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Can we spend $52T without raising taxes on the middle class? Sure we can. We can call them fees. We can call them fines. We can apply employer payroll taxes. We can use tariffs. We can tax financial transactions, wealth, property, corporations, etc. We can even just print/borrow the money. You see, the only taxes paid by the middle class are direct taxes in their income. At no point will any tax designed to only impact the rich ever have an affect on the poor and middle class. Elizabeth Warren has assured me that she will not sign any bills that don’t lower the costs to middle class Americans. This is the same way we will defeat climate change. At no point will anyone but rich, white, straight men pay for anything.

It’s time to get on the reality train. Come join us over at DailyKos where we are already discussing how we will be spending all our new found savings from a Warren presidency.

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Maybe we can put it on blockchain? That will fix it.

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OK, let's compare

This to

Trumpcare.

Whenever that promise materializes.

It will be so great.

How long have we been waiting?

Trump admin has made several useful reforms. Yes, you have to wait because any reform has a comment period, etc.

I'm not sure if they all passed thourgh comments yet, but one was for benchmarking prices vs. OECD prices for drugs, and others made it easier for small group insurance.

Trump price control for drugs pegged to OECD--what have you been smoking? Pot deregulation hasn't happened yet.

I'm still waiting for the gun controls he promised.

Maybe after the next mass shooting.

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But the US healthcare system must have some serious problems if they need to spend, after assuming several magic cuts in costs, 5.2 trillion per year, which is 25% of GDP, on a single payer system. Most developed countries spend 8-10% of GDP on a single payer system.

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"Another part of the plan is to pay lower prices — 70% lower — for branded prescription drugs. That is supposed to save about $1.7 trillion, but again focus on which opportunities are lost. Lower drug prices will mean fewer new drugs are developed. There is good evidence that pharmaceuticals are among the most cost-effective ways of saving human lives, so the resulting higher mortality and illness might be especially severe."

But Warren~s infinite wisdom has already incorporated in her plan that with economic growth in China and India, soon 90% of the world's drug sales revenues will be outside of the US so the negative externalities from destroying profits of US sales of pharmaceuticals on drug research will not be so significant.

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That's all very interesting, but there's just one problem: EVERY OTHER DEVELOPED NATION ON THE PLANET HAS FIGURED OUT UNIVERSAL HEALTHCARE AT A LOWER COST.

It's really quite bizarre watching politicos and econs work themselves into knots trying to squelch universal healthcare with discussions of elasticities, opportunity costs, etc. But the most obvious data points, i.e. every other developed nation, get completely overlooked. You can make this sound very imposing and complicated and expensive, but England, France, Germany, Spain, Australia, and Japan have somehow figured this out. And their healthcare expenditures are LOWER than ours!

This.

There are very specific moments when you can' t make an omelette without breaking eggs. No Marginal Revolution is gonna help to unblock the entanglement of interests and incentives that try to keep the current system. In Chemistry, it is called activation energy.

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I'm plenty skeptical of government-provided medical care but if the EU and rest of the Anglosphere can figure something out to please their democratic majorities then I'm puzzled why we can't. One salutary effect would be labor mobility, which I never hear discussed. Another would be scrapping our incredibly wasteful tort system. Nowhere else on earth has anything like it but again, economists don't seem too interested in discussing it.

If we can socialize medicine for federal, state and municipal employees, military veterans, old people and poor people, then I'm not sure what the political argument or strategy is for not extending it to the rest of us.

The problem is assuming that Europeans and Americans have equal expectations regarding standards of living.

What is sufficient to remain politically tenable in Europe (and Canada, to a lesser extent), whose residents have lower per capita incomes, are more tolerant of large government, and are generally more disposed to accepting if not a lower standard of living then perhaps less luxuries, is not necessarily feasible here.

One might argue that the problem then is that Americans have unrealistic expectations regarding both their health care and how to pay for it, and need to learn to live with paying more for less under a state-run program. This isn't necessarily untrue, but then I don't see any political candidates being willing to say it, either.

Until they do Warren's plan, as well as the promises of her leftist compatriots, can't be taken at face value.

I agree a society that does hip replacements for dogs and piles up debt at a trillion dollars a year is probably not going to be competent at administering some national insurance/socialized medical care scheme.

But as immigration and offshoring drive wages and living standards down to a global mean, I think somebody is going to figure something out, and they'll be the Party in power for the two successive generations after that. It might as well be the Republicans, and they can stop chasing the Democrats' framing on identity politics for a change.

A lot of things come into focus with a comprehensive medical care scheme. Immigrants have to be scrutinized for net tax production. You might not be able to afford so many overseas deployments, etc.

An alternative strategy, one somewhat pursued now by the non-cuck elements of the GOP (i.e., the GEOTUS), is to remove the factors that cause the downward pressure on wages and standards of living.

I could all but guarantee you that if we stopped the bleeding on immigration and continued stepping back from free-trade globalism, socialized medicine would not be nearly the issue it is, partly because Americans would be prosperous enough to afford the costs and partly because we would have removed a major drain on the system in the first place.

But that strategy doesn't buy votes or give the elites one more channel with which to control the proles which is why it's verboten among Warren et al.

Shutting down immigration would not result in increased prosperity in the US. That's not how economics works.

It's not a matter of "economics" working. Lebanon would be doing a lot better without 2 million Syrian and Palestinian immigrants, for example. Tibet could use less Han immigrants, Turkey less Kurdish immigrants (or vice versa) etc.

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It works that way when you're paying more for immigrants' health care than they provide in economic benefit, which is already a major driver of health care costs and no doubt will be even more so after the leftists open the borders and provide free health care to anyone crossing them, as they committed to doing at the first Democratic debate.

You'll notice Warren's proposal doesn't exactly have a mechanism to recoup the costs of medical tourists, other than soaking the rich. That's because, again, financing the proposal is not as important as gaining the control it provides.

Weird that immigrants are an out-sized share of doctors, dentists, pharmacists, and caretakers. Seems like they might actually be alleviating those healthcare costs.

https://www.pbs.org/newshour/health/new-study-shows-1-in-6-u-s-health-care-workers-are-immigrants

Didn't follow the link, but I suspect "immigrant" in this context is not, low skill, non-English speakers who came in illegally or overstayed a visa. Legal immigration, especially with merit considerations, is a completely different conversation.

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+1ish.

"Figuring out" universal healthcare at some lower level than US consumption is probably not too hard.

Figuring out universal healthcare such that no one gets lesser care than they do today, no one pays any more money, and consumption doesn't significantly reduce... is probably an absolutely insane want. Since US costs are driven by his consumption rates, not high prices. You have to be a fantasist who believes that US costs are due to uniquely high prices which are driven by "corporate greed" or some such, to imagine anything much different. (And perhaps many Democratic Party frontrunners are perhaps such fantasists?)

What qualifies them as fantasists is the notion that we can afford not only to pay for the health care of all our citizens but also that of anyone who immigrates here under an open-borders policy.

There are something like 1.5 billion people (with a b) who already want to come to the US, a number that would not only undoubtedly increase if free health care were to be added to the pile of benefits but would also skew the immigrating population towards those with existing medical needs, i.e., those who would use more resources under such a system.

The notion that we can plausibly afford such circumstances without a substantial drop in services, one that the same people now clamoring for free health care as a right would undoubtedly find unacceptable, is ludicrous to the point of immediately disqualifying anyone earnestly proposing such as a serious person. And yet here we are discussing such from the presumed Democratic front-runner.

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Is it fair of me, then, to request folks like Elizabeth Warren figure out the "lower cost" part of it before we go for the "universal coverage?" I mean, that makes sense, right? If you feel like you're overpaying for something, maybe figure out a way to not overpay before buying a bunch more? Just a thought.

Yes that's a fair request, my issue is with Cowen's characterization of the core policy issues. He scoffs at the idea of lower drug costs and lower specialist compensation despite the fact that both of those seem to be quite effective at lowering costs in other countries. He also mocks the idea of hiring more IRS agents despite the fact that tax avoidance in the U.S. is likely nearing $1 trillion per year. He finds taxing capital gains to be crazy, but the vast majority of equities are held by the top 10% wealthiest households.

Warren's plan focuses on reducing costs and raising revenue. Cowen would just rather scoff and offer hand-waving rather than provide an earnest rebuttal.

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They don't want to start with lower costs because the first line to cut is...labor expenses.

Good luck cutting doctor and nurse salaries to French levels.

I'd start with some program to subsidize medical school, if you want to lower costs.

Then I'd benchmark drug prices on median or average OECD price. (Trump administration is attempting to do this, but guess who opposes this?)
Get rid of certificates of need.

If single payer, do it with vouchers, like France. You can therefor use pro-market forces as part of your plan.

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Bob, the US has a higher cost base because of different choices made in the past, but if you look at current numbers, the US system now controls health care cost growth essentially just as well as other developed countries do; US cost growth figures are in the middle of the pack for the OECD. The problem is that no system anywhere has ever succeeded in sustained reductions in health care costs.

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To see the benefits of an American single payor system, one just needs to take a look at the government K-12 education system. Just visit one of our fine urban schools and you will see children from all walks of life receiving the best possible education in the world. Teaching positions are so sought after that only the best and brightest even bother applying. While non-government schools are able to skim off the privileged class, we pride ourselves on being able to lift up even the poorest of students and turn them into academic champions. We make no excuses regarding poverty, learning disabilities or parenting issues.

Over the past 2 years we’ve seen a surge in the Red4Ed movement. Our brave and proud teachers have been demonstrating and protesting about all the cost savings or single model is producing. Our brave brothers and sisters in The Chicago Public Schools are fighting hard to make our system even better and cheaper. Unfortunately the GOP has brainwashed our current mayor into believing we are not as great as we are.

Our children are so prepared for life that we find it unnecessary to worry about minimum wages or post secondary education. Long gone are the days of colleges and universities complaint about unprepared students. Gone are the complaints about student loans because our students are so gifted, they choose only the most lucrative majors and even complete graduation before scheduled.

So yes, single payor is the only way forward. The only question is what will we improve from the evils of capitalism next.

Warren2020

Vouchers with private providers are also single payer. So single payer and private provision

In case it wasn’t obvious I also oppose ANY schemes that funnel money away from our single payer education. This includes vouchers and the horrible frauds known as charter schools. Only government teachers know what’s best for our children and only government teachers should be paid. If the 1% want extra supplemental education like limousines instead of busses then they can pay for that. But no institutions that offer the same high quality K-12 education should be allowed. It’s the only way forward.

#CompetitionIsExploitation

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Vouchers with private providers are also single payer. So single payer and private deregulated provision may work.

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Debt does not matter anymore for a desirable country like the . As long as more people want to come in than leave, as long as businesse wish to be there, another 1000 trillion invested in people and infrastructure will make no difference and will be a net positive. There is no need to tax anyone, just print the money, call it QE or whatever. Remember that money spent on health, education, infrastructure is an investment and not really an expense. As providing insurance is no longer a cost to the company, cost of doing business will reduce . If investment in housing and transportation reduce cost of living then companies can cut salaries and become competitive. How come there is never a shortage of trillion s for bank bailouts and endless war, but an investment in health that will pay for itself in quality adjusted life years a bad thing? When I decide to migrate to the USA the national debt will not enter in my calculations. All you need to do is ensure law, order and services.

As a thought experiment, if tomorrow the fed just assumed all the national debt by adding zeroes somewhere, would anyone care? Debt holders get paid as usual after all,and bonds are still issued if people want it for dubious regulatory or accounting reasons.
Hell! Does debt even matter if interest rates will be zero forever?

As long as spending is for investment in your people, inflation will not be a problem, imagine tha government forcibly taking over land and building. Building mega public housing in SFO , that is deflation for rents. Healthcare is really really cheap to provide if the horrid system in the USA is dismantled. Higher education is done for peanuts in Europe and Asia. I see deflation everywhere not inflation if we get rid of bad regulation and nimbys.

Summary: it is not the debt, it is what you did with the money that matters. Think investment in your people and infrastructure Vs endless wars and bailouts.

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True, true, true, and yet your point is completely overlooked by most economists. They seem to have completely forgotten the lessons of the antitrust movement. Without government intervention, corporations consolidate wealth and power and restrict supply wherever they can, driving up prices. We see it in housing, pharmaceuticals, and higher education.

Both housing and higher education are exceedingly decentrialized sectors.

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Housing and higher education are exceedingly decentralized

They are nominally decentralized, but they replicate oligopoly power through excessive housing restrictions, accreditations, and other means of restricting supply. Harvard, Stanford, Georgetown, or any other university could put all of their educational materials online for free. Any Phd could start an online learning program but they would be shut down within days if they tried to call it college or confer degrees.

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> Yet because so much of our elite media class wants Elizabeth Warren to win

TC is cheering impeachment and removal of Trump. Maybe he doesn't want Warren to win, but he seems to want Trump to lose more. I'd put TC in firmly in the "elite media class".

> I don’t mean to pick on Warren. Virtually all politicians, of both parties, fall prey to similar fallacies...

Sure, every politician has flaws, but neither Biden nor Trump are proposing anything like this type of explosive new federal spending. It seems quite reasonable to pick on Warren (and Sanders) on this issue.

Were the same anti spending arguments used when universal public education and healthcare were implemented in Europe? Surely tha spending was a success? Again,as long as the money is used to invest in your country, it will pay itself back.

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I know it’s not the focus of your post, but you really undermine your argument when you use nonsensical, far-right phrases like elite media class. The average journalist makes $40k and the top news network is Fox News. Who is this elite class? Is it possible that the phrase is just a way of grouping together all of the people that you disagree with so that it’s easier to disregard their opinions and mock them as an out of touch villain?

Beyond that, you seem so eager to dismiss the liberal idea of Medicare for all that you end up arguing vehemently for the status quo in a healthcare system nobody agrees is in good shape or economically sound. You can laugh at plans to lower prescription costs, but to do so you are ignoring the extreme disconnect between prescription pricing and development costs, and the regulatory system establishing the monopolies that lead to it.

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nonsense, we are already running a $5 trillion military and $29 trillion bank bailout largely off-books

and no one has even noticed

Thanks! That is exactly my point!

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1. Military spending is currently $850 bn per annum and the ratio of military spending to domestic product has hardly been lower in the last 80 years.

2. The banks received bridge loans, which they paid back with interest. The transactions in regard to which the Treasury and Federal Reserve lost money concerned the rescues of AIG and the auto industry components. You're exaggerating the losses by 3 orders of magnitude.

https://www.theguardian.com/commentisfree/2013/mar/11/us-public-defrauded-hidden-cost-iraq-war

You fancy that 80% of the military budget is somehow hidden from view? And that we'll all learn about it in The Guardian?

Don't think I didn't notice that you tried to avoid addressing the point with some bush league sophistry.

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Caning, You have only included DOD and excluded VA and DOE parts re nuclear weapons, and also past funding costs that necessitated borrowing.

"Estimated U.S. military spending is $989 billion. It covers the period October 1, 2019, through September 30, 2020. Military spending is the second largest item in the federal budget after Social Security. The United States spends more on defense than the next nine countries combined.

This estimate is more than the $750 billion announced by President Donald Trump. The United States has many departments that support its defense. All these departments must be included to get an accurate picture of how much America spends on its military operations." Here is the link: https://www.thebalance.com/u-s-military-budget-components-challenges-growth-3306320

No, I haven't, because the former is not military spending and the latter is not contextually important. He's off by a factor of six, and you're fussing about the 4% or so spent at the Department of Energy. Quit pretending you should be taken seriously.

Ha Ha, I like the phrase not contextually important re the VA. And, ignore the DOE spending because it is only 4%.

Did KellyAnne give you that phrase >not contextually important< I've got to give that one to my tax accountant for use on taxpayers who fail to report income.

Not contextually important.

That's a new one.

Using apples to apples comparison:

Defense spending % of GDP
1960: 8.6%
2019: 3.1%

Definitely room to cut that down to 2% though.

So what. Percentage of GDP is irrelevant. The question is whether it gives value, is efficient, and is aligned with our needs, and doesn't crowd out other things that are more important.

My alcohol consumption as a percentage of my income has declined since I was 21.

Sweet now apply your cost benefit analysis to providing health care to the elderly and disabled. Make sure to provide documentation on how keeping grandma alive doesn’t crowd out our needs. Also, does Johnny really need a motorized wheelchair?

Please explain your comment as it doesn't make sense to me.

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Once again, in his Bloomberg article, Tyler hits the nail right on the head. It is always the unseen costs that politicians do not see. Why? For one thing, it's tough. And given it's unseen, they don't have to pay attention. It's all benefit and no cost. If we could find a way to really teach American society about how unseen costs impact economic decision making, we would be much better off. Articles like this one certainly help. And while we're at it, it's not more government that's the answer -- it's less. The most evil thing the government in the US has done is to constrain competition and make many American's believe it is the free market that is the root of the problem. In health care, there is anything but a free market. Insurance companies have written rules for themselves, thanks to our elected officials in US government, that constrain competition to the point where one doctor cannot know what a doctor across the street is getting in compensation. I could go on, but the remedy to this problem is breaking the link between medicine and government.

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"Yet because so much of our elite media class wants Elizabeth Warren to win"

This would have been a shocking statement not too many years ago.

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Warren is stealing idea from Trump!https://www.biospace.com/article/trump-plans-new-favored-nations-clause-to-tie-drug-prices-to-the-costs-other-nations-pay/

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This is just the written form of that weird thing Americans do when you point out some highly obvious shortcoming of their country; they just kind of stroke out.

You say something simple like:
"The U.S. has the lowest life expectancy and the highest disease burden among comparable developed countries, including Australia, the Peterson-Kaiser Health System Tracker notes. The U.S. spends about $8,745 per capita on health care costs, compared with less than half that -- $3,997 per person -- in Australia."
Hearing that their eyelids droop, cheeks twitch a bit, the "American #1" cognitive dissonance takes hold and everything other than the amygdala goes into a full reboot. A second later they blink a few times and just move on as if they heard nothing, tyrants dream of control like this.

A small continuation of your argument. I have a friend who has the choice to spend $400 for a prescription in America or spend $60 for the same prescription from a Canadian source.

Something is deeply wrong. Yet no one is doing anything about it.

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It’s labor. Everything in PPP adjusted:

GP Doc salaries:
Australia: $91,000
US: $161,000

Extrapolating, medical labor in US is 77% more expensive.

The obvious solution is immigration of medical labor until reaching equilibrium with OECD. Somehow instead Democrats decide to tax the middle class $52 trillion more dollars and nationalize the industry.

Insanity.

This is the same party that puts out “Day Without an Immigrant.”

Well, we’re living it in medical costs.

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Alas, you really are whiffing, professor, on this one.
What do you think is the share of gdp taken by health care over a decade and how does that compare to the $52 trillion? oh, about the same? IOW this is the amount that will be spent according to projections either the current awful way or the good alternative way. And who pays now? And who would pay? the costs are roughly the same; the burden shifts.

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You know, the more I read this, the more annoyed I get. Are you being deliberately deceitful?

We don't have to pay "another" $52 trillion. As the NYT Times piece points out, half the plan comes from other sources (i.e. not new taxes).

And we don't have to tax the middle class, we could fund it with a wealth tax.

And as far as I can tell, all this press coverage and hyperventilating ignores the fact that individuals will no longer be paying premium or copays directly, and money is fungible and doesn't care if the check goes to the IRS or an insurer. I mean, isn't this something they teach economists?

Sheesh.

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Tyler, the current situation is not a low probability outcome of having Donald Trump as President. If you wanted to avoid this situation you should have advised people to vote against Trump and for Hilary Clinton in the last Presidential election. You could then hope the Republican party would offer better policies and a better candidate the next time around.

But you didn't. While it's impossible to say what would have happened, your influence may have been enough to keep a man who was not suited to make decisions lives depend on out of the Presidency. So, I blame you and other people like you. You didn't act in the interests of the United States and the world by doing what you could have to keep someone like Donald Trump away from control of the world's most effective nuclear arsenal and you didn't even clear the minimum bar of doing what was best for your party.

And yet in 2019 we have the current crop of Democrats. Tell us again that it’s the Republicans that need to learn something and rally around a more reasonable candidate. Crazy begets crazy. Democrats had their chance to elect reasonable Republicans. Instead they called them all racists to shut them up. Now the GOP elected someone who welcomes their hate. If you want reasonable Republicans as a counter party then you should run reasonable Democrats.

Tyler didn't need to learn anything. He wasn't blind or deaf. He doesn't have a memory like a sieve. He knew what kind of a person Donald Trump was and is. But he still chose to support a candidate that clearly could not be trusted with control of nuclear weapons and was obviously the worse choice not just for the United States but for the future of his own party.

If in the 20th century you had told me one of the two main contenders for the Presidency would be the wife of a former President I would have thought the United States had become like South America. But if you then told me the Republican Candidate would be Donald Trump I would want to try what ever future drug it was you were smoking.

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NYT write up was pretty good. It was nice to read something with little ideological slant.

Per usual - NYT comment section remains the best comedic satire on the internets.

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Tyler. What is the cumulative cost of the War on Terror + Trump tax cuts ? Come on. Why do you guys on the right get your panties in a bunch any time the left wants to increase the deficit but it's ok to kill people and make corporations richer ?

+1. Trump is inflating the debt spend faster than anybody else on record. Government deficits are only bad if the other side does it.

Not true. The deficits for some years under Obama were higher.

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It strikes me as odd to jump into the reality of Warren's plan without engaging with the reality that it will never, ever be enacted in this form, even if President Warren were to kill the filibuster to try to do it. Joe Manchin is not voting for this plan.

Her plan is best viewed as an opening offer in a negotiation about increasing health care. The Democrats have finally learned that *starting* with the compromise position--as Obama did repeatedly to his discredit--does nothing to get GOP buy-in, and treating all policymaking as a hostile negotiation is the only way to proceed.

In that frame, these insane numbers make more sense. Whether it will work is another story, but it makes more sense.

Nice post, +5 internet points

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+10. Economists understand bargaining power in the abstract but not the actual process of bargaining. Oddly, this was written here not too long ago:

"Economists themselves have been of no great help ... They love to debate Elizabeth Warren’s plan for a wealth tax, an idea that probably isn’t going to happen (just ask Mitch McConnell or, for that matter, any moderate Democratic senator). "

https://marginalrevolution.com/marginalrevolution/2019/10/how-can-california-be-left-in-the-dark.html

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Do you think pharmaceutical companies spend most of their revenues on R&D then? They can save up to $30bn a year on marketing.

https://www.vox.com/2015/2/11/8018691/big-pharma-research-advertising

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TC rarely retweets, but when he has in the past 6 months, chances are it was something negative about wealth taxes. Wealth taxes may not be "marginally efficient", but after years of degraded estate taxes I think they are advisable for democracy.

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GDP is the measure of our productive economy. GDP is the sum of household, business and government spending (and likewise the income of those sectors equals that spending, because ALL spending is someone else's income). Our economy depends on household spending (2/3 of GDP). That spending is limited by household income (which comes only from those three sectors). Business provides that income to the extent demand (business opportunity) exists, and government provides the rest (by way of bookkeeping entries to household bank accounts). All that's important to the economy is maintaining this flow, and with a fiat currency (whose value, by definition, depends ONLY on currency-users perception), there are no limits other than that perception.

Lesson: The government can spend whatever the hell it wants - so long as that money gets re-spent.

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Don't forget, this $52 trillion has to be paid for after Warren ("on day 1 of my presidency") will end all fracking and offshore drilling, eliminating all the revenue the government gets from that.

And, she'll need to come up with the $52 trillion while also spending the money needed to completely remove fossil fuels and nuclear power from the energy infrastructure in 8-13 years and replace it with massive 'green' energy projects.

And she's going to do all that while also expropriating 20% of all corporate shares to be redistributed to the 'workers', and while restructuring all boards of corporations to have 40% worker representation (i.e. union reps).

And this isn't even half of her multi-trillion dollar plans to fundamentally reshape the entire economy. What could possibly go wrong?

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