It’s a floor wax. No it’s a dessert topping! The Ryan-Romney Medicare plan

Mitt Romney and Paul Ryan are pursuing an internally contradictory sales pitch, which includes loud general calls for “adult conversation” about entitlement reform, coupled with demagoguery over the very idea of Medicare provider cuts in Obamacare. Republicans’ elaborate effort to combine two things that really don’t mix calls to mind that classic SNL commercial for a combination floor-wax nondairy dessert topping.

For more on the dysjunction between a stridently conservative GOP platform, various Ryan proposals, and the evolving Romney Medicare plan, see my full healthinsurance.org column, here.

The Subsidy of Marriage by Social Security

Josh Barro notes that marriage cannot be an entirely state issue because of the way in which it impacts things like Social Security and Medicare eligibility. Below is the majority of a post I wrote in September, 2011 on the subsidy of marriage provided by Social Security…..

Gene Steurle and Stephanie Rennane have a nice policy brief put out by the National Institute for Health Care Management on the lifetime contributions and benefits of Social Security and Medicare. This is mostly familiar stuff, with lifetime Medicare benefits consistently being several times larger than contributions to the pay-as-you-go program, and Social Security lifetime contributions and benefits being more similar for singles and two-earner couples. However, one thing jumped out from this figure (circled):

Continue reading “The Subsidy of Marriage by Social Security”

Medicare’s funding future: income v. payroll taxes

(cross posted at freeforall)

The 2012 Medicare Trustees report is out (h/t @sarahkliff), and one graph jumped out at me: the historical and projected financing components of Medicare (payroll taxes, income taxes, premiums, and the much smaller items of taxes on benefits for higher income persons and state contributions for Part D).

Historically, payroll taxes have been the primary funding mechanism, but the further in the future we go, income taxes become increasingly important (general revenue transfers) for financing Medicare. As the report says on p. 25

The Trustees expect growth in SMI Part B and Part D premiums and general fund transfers to continue to outpace GDP growth and HI payroll tax growth in the future. This phenomenon occurs primarily because, under current law, SMI revenue increases at the same rate as expenditures, whereas HI revenue does not. Accordingly, as the HI sources of revenue become increasingly inadequate to cover HI costs, SMI revenues would represent a growing share of total Medicare revenues.

There are obviously many moving parts to such a projection, and there is great policy uncertainty about what we might do in the future. With that proviso I note two points:

  • Shifting more Medicare financing burden to income taxes is an increase in the use of a more progressive form of taxation (income taxes given current tax code) to fund Medicare
  • Payroll taxes and history of beneficiaries having paid payroll taxes have been a key part of the popularity of Medicare, and reinforced the (incorrect) notion that beneficiaries had pre-funded their Medicare costs (it is a pay as you go system). If income taxes are used to pay a larger portion of Medicare in the future, it may help to end the perception that beneficiaries already paid for the cost of their care. This post shows that payroll taxes by beneficiaries do not cover the cost of their care; they weren’t designed to do so, but the perception lingers to powerful effect that makes addressing the cost side of the program very hard

“Tiger Moms” Promote Academic and Career Success? Prove it.

Amy Chua is getting slapped around for her Wall Street Journal article on “Tiger Mom” parenting. Many parents responded to her piece by saying, essentially, “There’s more to life than achievement, there is happiness, freedom, autonomy, and unconditional love!”

Well, that’s true, but those critiques concede something that is open to debate: Where is the evidence that the children of Tiger Moms achieve anything more in their careers than children reared in other ways? Yes, extraordinarily high pressure to achieve, unlimited parental involvement, constricted social activities, endless college prep and countless hours of drill and kill learning sessions can generate good grades in high school, high SAT scores and admission to an elite university. But prove to me that the skills required to achieve those things are the same ones that make people successful professionals. In other words, setting aside whether Chua is right in her view that achievement is the ultimate goal of parenting, I don’t think it’s clear that her proposed parenting style is more likely to produce it than other more flexible approaches.

I went to college with some students who had been parented a la Chua, and there is no question that they all worked incredibly, admirably hard. There was also no question that none of them could find a social skill with two hands and flashlight. That defect alone ruled out dozens of career paths for them, and would go on to hamper their career progress and income growth after college. They also suffered from an inability to collaborate because they had to be number 1 at everything (to paraphrase Chua’s own standards). I remember particularly the Tiger Mom offspring on our softball team who booed our own players for making great plays (they were making him look bad as an individual by showing him up, he felt). No one on that team would have recommended him for a job in any team-oriented work environment, which is a large portion of all work environments.

The U.S. is not Confucian China: Advancement in adult careers depends very little on standardized tests and rote memorization (even in the civil service, various lawsuits have largely wiped out testing regimes). As life goes along, those making selections for career opportunities usually have many people who can look good on paper in front of them, so they make choices based on other things. I can’t tell you how many undergraduate and graduate students I have seen in my career who had thrived up to a point because of hard work, endless memorization exercises and good test-taking skills but then simply flamed out because they could not produce a creative piece of scholarly work or engage in collaborative learning. And I have seen comparable numbers of hardworking kids who flunked out because of ongoing depression that came from ridiculous expectations or social isolation. In short, if you want your child to grow up into a high achieving adult, following Chua’s advice might well impede rather than facilitate your success.

p.s. I chose consciously to focus in this post on the Tiger Mom style of parenting rather than stereotype racial groups as Chua did. There are Tiger Moms in all cultures and there are many Chinese-American moms who parent in other ways.

Illogical but effective: The rhetorical attack on health care reform

Last October, Jonathan Chait described GOP arguments against health reform as logically inconsistent, but for that very reason especially politically effective. If anything, this strategy will be even more hypocritical and potent in the midterm elections.

When I started out in public policy, one of my mentors worked in city government. Abandoned properties were a serious local problem. Many became shooting galleries or crack houses. Others simply became overgrown eyesores that dragged down property values in the surrounding community.

The city had a cumbersome condemnation process that resulted in a long waiting list of properties. Aldermen were constantly screaming about it and intervening to move their constituents ahead in the queue. There was always talk of a streamlined process, whereby the Mayor could condemn these properties more quickly and efficiently.

I asked my friend why this never seemed to go anywhere. “Oh,” he said. “The aldermen would never allow that.” The maddening red tape provided too many valuable opportunities to perform constituent services for the aldermen to give it up.

Something like that is occurring in health reform. Last October, Jonathan Chait captured the spirit of this pincer strategy in one of the great thumbnail sketches of the health reform debate:

One could muster ideological extremism to make the case that the government has no business subsidizing health insurance for people who can’t get it. Alternatively, one could make the equally nutty case that Medicare should not lose a single dollar from its budget, however wasteful and inefficient it may be. But no political philosophy on earth could justify both of these fanatical positions at once. Somehow, though, the Republican Party has managed to stake out this absurd territory –Claude Pepper minus the social conscience, Milton Friedman without the small government.

Its total lack of intellectual merit aside, this odd philosophical hybrid offers the GOP maximum demagogic potential.

If anything, this strategy is more politically potent now than it was in autumn 2009. Voted into office by the electorate of 2020, President Obama faces a much older and whiter midterm electorate akin to that Michael Dukakis confronted 22 years ago. Republicans attack Democrats for failing to curb entitlement spending, while simultaneously scoring points attacking Democrats for sensible but unpalatable measures such as curbing Medicare Advantage overpayments. Such fiscally conservative measures enjoy wide support among policy experts across the board. This fact is no more politically relevant than is the fact that Bush administration officials regard Donald Berwick as uniquely qualified to lead Medicare and Medicaid in the era of health reform. Republicans attack Democrats for one-size-fits-all efforts to curb the growth in Medicare spending, while simultaneously attacking Democrats for “micromanaging” things through comparative effectiveness research and related efforts.

(See Ram Krishnamoorthi for more on these points.)

Amid all the noise and self-contradictory rhetoric, it’s worth asking what the alternative, positive vision might be among the most substantantive Republicans. Former HHS Secretary Michael Leavitt provides one answer in a recent Washington Post op-ed. In addition to echoing the above Republican talking points, he says:

What’s needed is a new vision for Medicare. Instead of micromanaging prices, the federal government should provide oversight of a marketplace in which cost-conscious seniors choose among competing insurance and delivery system options. That’s how the new drug benefit works, and costs have come in much lower than expected because genuine price competition drives down costs much more than any payment regulation can.

As I’ve written elsewhere, This is a very poor foundation to either control costs or operate an effective Medicare program. Let’s start with the new drug benefit, Medicare Part D. Amazingly, the program’s estimated long-term unfunded liabilities appear to exceed those of the entire Social Security system. Part D included (until health reform) sloppy features such as the donut hole. It forbad strong government bargaining over drug prices.

In just about every way, Part D is less fiscally responsible and less carefully crafted than this year’s health reform. In hindsight, I’ve also come to believe that it was politically and substantively irresponsible to enact such a poorly-targeted and costly Medicare expansion without a more careful balancing of social needs across different age groups.

As for Leavitt’s vision of consumer empowerment, there is definitely a group of healthy, relatively affluent people who could assume these responsibilities and risks. I’m intrigued to see how these consumers would behave differently–say towards knee replacements and CAT scans under high-deductible plans in which their own money is on the line. We know too much-from the RAND Health Insurance Experiment and from other studies–to trust such arrangements could be safely implemented within less healthy and less affluent patient groups.

It’s especially far-fetched to believe that consumer empowerment can markedly lower costs for Medicare recipients. As Austin Frakt notes, this is the animating and largely-failed vision behind Medicare Advantage, a program that serves the healthiest segment of Medicare recipients. I wish individual patients had the knowledge or the bargaining leverage to discipline the medical marketplace as consumers discipline markets for breakfast cereal or home computers. I see little evidence to support this view.

And let’s be real here. Medicare expenditures are concentrated within a sick group of elderly people who face life-threatening, life-altering, or disabling illnesses such as cancer, stroke, heart disease, and dementia. Is it smart or wise to cast them as “cost-conscious seniors [who] choose among competing insurance and delivery system options?” Is there any evidence that seniors (or their families) want to assume these burdens and risks? Is there any evidence that the American public would stand for that, or that these seniors are equipped to perform these tasks well?

Ironically, Leavitt’s essay made me even more conscious of the advantage of the public option, Medicare buy-in, and other efforts to use government’s great market power to discipline Medicare expenditures. We couldn’t get 60 Senate votes for these proposals. They attracted expected heat from traditional conservatives. Moreover, the entire supply-side of the medical economy was queasy about these measures. That’s too bad. These redacted elements of health reform are much more likely to control Medicare cost growth than anything Republicans offer. These redacted measures are also more likely to win the allegiance of the American people.

Pushpine and restoring the Mata Atlantica

A proposal for carbon offsets in the Brazilian Atlantic Forest.

The death toll in the Rio favelas from floods and mudslides – now at least 205 – would have been much greater but for an extraordinary achievement a century ago of six anonymous slaves under the generally undistinguished Brazilian Empire:

From the sixteenth to the nineteenth centuries, tropical forest in Rio de Janeiro was gradually substituted by sugarcane, coffee plantations, and pastureland. Intense land use and deforestation caused problems in the city’s water supply. Mainly for this reason, Manuel Gomes Archer was hired at the end of the nineteenth century by Emperor D. Pedro II to start a flora restoration project. From 1862 to 1874, Archer and a few slaves planted about 72,000 seedlings of native and exotic tree species, e.g., palms, bamboos, cedro rosa, jacaranda, sapucaia, jaqueira, and eucaliptus. Seedling sources were located in the Paineiras Forest, Archer’s farm in Guaratiba, and in the Botanical Garden of Rio de Janeiro. …. The result was an environment conducive to natural forest regeneration. This was because heterogeneous and predominantly native species of trees were used in this project, unlike the procedure usually followed in forest plantation at that time.

(Here, edited to remove learned apparatus).

The steep hillsides round which the bairros of the city flow are now the Tijuca National Park, one of the largest urban forests in the world. More than half the flood deaths occurred in the twin city of Niteroi across the bay, which is  much smaller and flatter but doesn´t include any of the park – I infer that well-established forest offers better protection than scrub.
Continue reading “Pushpine and restoring the Mata Atlantica”

ARTIKEL POKER ONLINE duit ori

Augusto Pinochet has $160 million worth of gold stashed away. Wouldn’t you like to know whether any American individuals or institutions got a taste of that wealth?

I’ve never been able to understand my leftist friends who admire Fidel Castro, or my rightist friends who admire Augusto Pinochet.

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Selling our lives cheap

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Some Inconclusive Thoughts about the Death Penalty

As an abstract question in moral philosophy, I think I’m for capital punishment, on two grounds.

First, if we punish petty theft with a little time behind bars and aggravated assault with somewhat more time behind bars, arguably there are some crimes – and I’m not at all sure that homicide is alone – that ought to be punished in some way not reducible to the less-time/more-time dimension, precisely because we want to mark them out as capital – i.e., chief – offenses.

Second, the real suffering created by a relatively humane execution may be much less, integrating over time, than the suffering created by a long prison term, both for the offender and for his intimates, and yet the fear of death appears to be such that most offenders (not all) prefer any non-capital sentence to death. As John Stuart Mill pointed out, the ideal punishment is the one that combines the maximum of terror with the minimum of actual suffering. [That argument would be more persuasive, of course, if the gap between sentence and execution were shorter; even if killing someone is less cruel than locking him in a cage for the rest of his life, forcing him to spend a decade waiting to be killed may not be. The same applies to the suffering of his intimates.]

Moreover, I’m not at all comfortable with life in prison without parole, or even with very long sentences short of that, because I don’t think that the 60-year-old we’re keeping in prison is, in the relevant sense, ‘the same person’ as the 20-year-old who committed that murder forty years ago.

And the risk of executing someone innocent is a strong argument against capital punishment only if death is in fact a much worse penalty than long imprisonment. I’d love to see procedural changes, starting out with much stronger charges to juries about the meaning of ‘proof beyond reasonable doubt,’ to make it less likely that innocent people get convicted, because I’m convinced that the we now have literally tens of thousands of innocents behind bars. But the abolition of the death penalty wouldn’t change that concern at all.

(There is, apparently, evidence to support the common-sense proposition that death-qualified juries — those from which jurors unwilling to convict in capital cases have been excluded — are more conviction-prone than ordinary juries, but that problem could be overcome by having a non-death-qualified jury consider guilt, without being told whether the case is a capital one or not, and a death-qualified jury consider the penalty.)

It’s also more than possible, though not proven, that the threat of execution changes the behavior of some offenders in the right direction. Putting the econometric evidence aside, as I’m inclined to do on topics this complex, there are accounts of bank robbery gangs in the 1930s who went into banks with unloaded weapons precisely to avoid the risk that someone would be killed and the robbers therefore subject to execution. I believe it is also the case that kidnappers-for-ransom of that era were reluctant to kill their victims – otherwise presumably a risk-reducing step – for the same reason.

Of course the opposite effect is also possible: perhaps some people commit crimes precisely so as to be executed, or find that the commission of a capital offense adds to the thrill. The empirical question — or quasi-empirical, if as a practical matter we can’t convincingly disentangle all the evidence — is whether the net effect is positive or negative. (And of course the answer to that might not be the same in all times and places.)

In my moral calculus, saving the lives of victims outweighs saving the lives of aggressors, at least if the numbers are even, and possibly even if they aren’t. The distinction between aggressors and victims seems to me to trump the action/omission argument that it’s not in general justified to cause a death directly in order to prevent a larger number of deaths. The cases used to make that argument tend to involve innocent parties on both sides, which is not the case here.

I recall an essay, though I’ve forgotten the title and author [Can any reader supply?] which makes the general moral case for the practice of criminal punishment on the following argument: If a situation arises in which it necessary that either A or B be injured, and if that situation arises due to the action of A, then it is A who should suffer. Insofar as that argument is valid, it greatly weakens the force of the argument from the act/omission distinction.

All that said, I have no trouble understanding, and sympathizing with, the position of those who regard capital punishment as the last vestige of human sacrifice and are aggrieved at being made complicit in it as taxpayers and voters.

(If I were a Christian, I think I would regard the account of the woman taken in adultery [John 8 1-11] as reflecting a clear judgment against the practice.)

When pro- and anti-death penalty demonstrators shout at one another outside a prison where someone is being killed, I know which group I’d rather go out to a meal with afterwards.

What I’m pretty sure of is that, in purely practical terms, the death penalty doesn’t deserve the attention it gets from either side of the debate. With the annual execution count below 100 and the annual homicide count near 20,000, it seems to me perverse, in a world of limited resources, to worry about abolishing executions rather than preventing murders. But even if it were the case that the death penalty prevented homicide, as a practical matter we could never carry it out frequently enough to make a measurable difference.

From the perspective of a generation ago, with rising crime rates and a scarcity of prison beds, it was not entirely irrational for voters – many of them angry about crime, prepared to be cruel to criminals in order to stop it, and worried that elected and appointed officials might be unduly inclined toward mercy – to use support for the death penalty as a simple test for a candidate’s willingness to be tough. But surely, with 2 million people behind bars, we’ve gotten tough enough.

I am, therefore, indifferent on the question of a moratorium on executions. But as someone professionally concerned with crime control, I’m a strong supporter of a moratorium on debating the subject; it’s a distraction from the work we really need to do.