Zasloff vs. Ryan

Representative Ryan has an earnest look and good hair but what do economists think of his ideas?  Some famous economists have cheered for sharp cuts because they argue that the deficit crowds out private investment and creates uncertainty about the risk of future hyper-inflation.

I am not sure what I think.  Dr. Zasloff raises some excellent points related to the costs of war and the last round of Bush tax cuts.

One “deep” thought.  As life expectancy continues to rise and as medicine continues to make discoveries that generate new costly pills for us to take, who pays for the increased Social Security, Medicaid and Medicare expenses?    Without knowing the details (yet) of Ryan’s plan, I like the idea of keeping those 55 and up “whole” and changing the rules of the game for those under age 55. I agree that this is a sharp discontinuity and it poses challenges for those in their early 50s.   But, for those in their 20s and 30s, this new “rules of the game” would allow them to plan out their life-cycle choices.

Author: Matthew E. Kahn

Professor of Economics at UCLA.

23 thoughts on “Zasloff vs. Ryan”

  1. Hmm, to take the least incendiary claim first — any “rules of the game” allow those in their 20s and 30s, and at other ages too, to “plan out their life-cycle choices”. Austerity doesn’t make things more predictable.

  2. What kind of “life-cycle choices” would prepare one for getting inadequate subsidies to purchase insanely expensive insurance in old age? Suicide while still young?

  3. Saving towards a defined out-of-pocket health budget, with the expectation of simply enduring any conditions that can’t be treated within it?

  4. There is such a thing as having a mind that is *too* open. All kinds of “stuff” ends up in there.

    And “Dr. Zasloff?” Seriously? Are you talking about Jonathan? Great guy, and extremely smart, but serious people don’t use “Dr.” unless it’s a medical degree. Just so you know.

    This debate is clearly making me forget my manners!

  5. Seriously? You like eliminating the safety net for people under 55? It’s not just “changing the rules of the game,” you know – a 40-year old person has been paying huge percentages of his or her income into Social Security, Medicare, and Medicaid via taxes for about 20 years. Too bad for them that they don’t get to enjoy any benefits of those programs, huh? Game change!

    Ryan’s plan is so unbelievably bad that I’m going to take your word that you haven’t learned any of the details yet. But then, why are you posting your thoughts on the plan? It’s not like summaries of the plan are hard to find; every political blog, every news outlet, and even multiple posts ON THIS BLOG reveal details about the plan. So why comment at all, if you don’t know anything about the plan yet? Would you read a movie review from someone who hasn’t seen the film? (In this case, given how utterly awful Ryan’s plan is, your post feels like a positive review of Gigli from someone who hasn’t actually seen it.)

    And I haven’t even gotten into how every health policy expert will tell you how impossible it is for a society to pay for health costs by simply managing “life-style choices.” I don’t hate you, or disagree with you on everything, but seriously, posts like these are why people hate economists.

  6. Health care costs are set to rise because we pay too much for health care – it is a problem with pricing. Medicare as it stands now does a far better job than private insurance of addressing cost control. So telling people they won’t get Medicare but instead will get vouchers to spend on private insurance will lead to even more rising costs. Either taxpayers pay even more than now, or we simply deny care, which are the only options if you don’t address costs. And health care costs are already out of control for those not on Medicare, making it increasingly difficult for people to pay for their premiums and co-pays, etc.

    If people cared about the deficit, they would work to control health care costs and stop slashing taxes on the wealthiest. Also, the might ensure that short term spending would go up, increasing demand and lowering unemployment and thereby increasing tax revenues. So what they are really arguing for is an even greater transfer of wealth to the already wealthy, and for dismantling social insurance. Interestingly the latter point makes it far more difficult to meaningfully plan out your life. Ryan’s plan includes vast tax cuts targeted at the top. The spending cuts are there to fund those tax cuts. This has nothing at all to do with the deficit. Also, businesses don’t invest when people cannot buy things. Talk of confidence in the face of a collapse of demand is nonsense.

  7. In a highly developed country (let’s stipulate that the US is one of those), do increases in life expectancy come from lives becoming longer rather than from infant mortality being reduced? Or should one just cut to the chase and as a rule read “increasing life expectancy” as “increases in expected years of life after retirement?”

  8. Dude, wtf? Why would you bother posting this vacuous chin-scratcher? It reads like a parody of intellectually lazy pseudo-centrism. You don’t know enough about the Ryan plan to have an opinion? That’s OK, but why would you imagine that it’s worth saying to anyone? And if the plan is a topic you want to talk about despite your ignorance, why not fix your ignorance about it first? You could read Ezra Klein’s relevant posts in fifteen minutes, and know all you need to about where Ryan is going. And what does “changing the rules of the game” for those 55 and under even mean? If your ideal is that seniors should be impoverished or they should die untreated – and it’s not completely clear which of those two options is closer to Ryan’s heart – then say so. Unless you’re really going to try to sell us some Glibertarian paradise, the notion that the solution to long-term health care involves 35-year-olds taking responsibility in some unclear way (that apparently is not “paying taxes”) while 56-year-olds don’t is just empty handwaving.

    All in all, I’m just hoping this post was in fact the rather weak parody it in effect amounted to.

  9. The only way someone can pretend to take Ryan’s plan seriously is to be ignorant of the details. Once you know he is not serious and instead looks to wreck a public program, there is no more serious thought to be devoted to the subject. Unless you wonder if it was purposefully way out there to make Simpson-Bowles look moderate, such that that POC will be enacted. If so, it is a decent gambit with the horrible press corps we have now.

    They are the Wrecking Crew and they seek to wreck things that have the word ‘public’ in them. It is that simple, and our weak press corps aids and abets that goal.

  10. Here’s a “deep thought.”

    While we’re shifting the cost of care to the individual, we’re giving yet another round of tax cuts to the most fortunate Americans while our military continues to battle in Afghanistan, while it continues “operations” in Iraq, and while it starts “operations” in Libya and the Ivory Coast.

    In short, people who aren’t rich are cannon fodder and then to be left on their own, people who are rich are to be rewarded for being, valued and rewarded by our government taxing them at the same rate they tax poor people.

    This isn’t remotely the American vision of Washington or Lincoln, of Roosevelt or even Nixon. This is social darwinism run amok, and applauding it’s boldness and newness is rank idiocy.

  11. I read this post and then decided that the book you’ve been flogging is likely worthless.

    Really, Mark, what is this guy adding? His “deep thoughts” are ridiculous. Put simply, they amount to just “courageously” implement the social policies of oh about 1820 or so. We have located The Great Stagnation: it resides entirely within the glibertarian mind.

  12. Russell, if I may: I disagree. There are two things going on in Matt’s post. There is the ridiculous consideration of Ryan’s plan to wreck a social safety net. The second is the perfectly reasonable:

    I like the idea of keeping those 55 and up “whole” and changing the rules of the game for those under age 55. I agree that this is a sharp discontinuity and it poses challenges for those in their early 50s. But, for those in their 20s and 30s, this new “rules of the game” would allow them to plan out their life-cycle choices.

    We can discuss whether 55 is too late in the game (likely, especially in our weak near-future economy and after so many lost so much in the Tech and Housing Bubbles – something that the rich are unaware of), but demographically something is not going to work out in the medium term. Changes to the system are in order.

  13. Dan,
    ” … but demographically something is not going to work out in the medium term. Changes to the system are in order.”

    First, it makes no sense to conflate SS, Medicare, and Medicaid. SS is fine, might need some tweaking down the road, not now. Medicaid is more important, but is swamped by Medicare. So we focus on Medicare.

    Second, exempting the over 55 (or whatever) necessarily distorts the potential solution space into a restricted set of options, none of which, I am not surprised to observe, contain the available fairly successful models of perhaps 30 other first world countries.

    If you want me to pay more taxes now and receive less benefits later just so that current highly Republican partisan beneficiaries can receive at least 3 times the value for their own contributions, you’re out of luck. Fair is fair.

  14. Can anyone recommend good reads on the economics of new and future medical technology?

  15. Russell, I don’t know how to break a social contract without widespread social unrest, so implementing a seriously flawed policy that results in such unrest is a non-starter for me. Second, aging and retiring Boomers are – or will soon be – net non-contributors to social programs, whether you want to conflate three with one for purposes of this thread or not. Demographically, the numbers are not going to work. And I question whether capitalists will allow wage increases to cover the difference. I suspect not.

    So in the solution space we will have an aging population with increasing demands on social programs. We will have to find money to pay for these programs and requirements. They will not pay for themselves. That is the issue. Will privatizing and allowing profit solve the issue? Is there an example on this planet where such an occurrence has endured?

  16. “Will privatizing and allowing profit solve the issue?”

    No. Medicare as it exists now is cheaper than any US private plan as
    it exists now. There are clear public choice arguments on why this fact is so.

    Dan, do you really not understand this stuff? You need to bone up on the
    available systems (of which there are a great variety) that deliver essentially
    equivalent health outcomes to the US–for about half the cost. I don’t
    particularly care which one of the the say top 20 got selected, just do it.

    People who still talk essentially pure voucher systems are not serious, are not
    courageous, and are definitely not familiar with the facts.

  17. Life expectancy “continues to rise”? You don’t know anything about life expectancy, do you? The major gains in life expectancy have been in reduction of infant mortality and infectious diseases. And oh, yes- wealthy people have longer and healthier periods in old age. But not working class people and poor people. They die years younger than wealthy people.

    “a male in the top half of the earnings distribution who turned 60 in 1972 could expect to live 1.2 years longer than one in the bottom half. By 2001, the gap had grown to 5.8 years.”

    The modest increase in life expectancy at retirement among working class people over the past 40 years has already been dealt with by raising the retirement age to 67. Those people have lost any additional years of retirement they might have enjoyed.

    And your suggestion would make things worse.

    “the widening of such socioeconomic differences—a phenomenon not observed in neighboring Canada, which has universal health care coverage—is at least partly explained by disparities in treatment for heart disease and cancer. As inequality in America worsens, we can expect this longevity gap between the rich and poor to grow even wider.”

    It’s just as Alan Grayson said: the Republican health plan is, if you get sick, die quickly. That is, as long as you’re not rich.

    So please, use teh google next time, before you inflict your blithely ignorant cruelty and greed on us again.

  18. Thank you, Bloix. You saved me the trouble. How is it that an august leader of the RBC fell for that ridiculous right wing talking point about “increasing life expectancy”? I know they “trained” Professor Kahn better than that at the University of Chicago. Right?

  19. Ryan’s plan is about as serious as baby vomit. Also his hair isn’t that good. The black hair widow’s peak combo makes him look like Eddie Munster. As far as stupid Republican Congressmen who are on TV too much go, Mike Pence has better hair; a classic look.

  20. Dan, do you really not understand this stuff? You need to bone up on the available systems (of which there are a great variety) that deliver essentially equivalent health outcomes to the US–for about half the cost.

    I do understand this stuff, thanks, despite the efforts of some to paint me as not understanding this stuff. And I have good hair, which may be the reason for so much angst.

  21. MK: “..medicine continues to make discoveries that generate new costly pills for us to take…” Does it? See Ben Goldacre’s “Bad Science” for evidence that basically medical science stalled around 40 years ago. The number of new compounds put on the market every year by the world pharmaceutical industry has dropped to a handful. This stagnation is all disguised by a marketing-driven profusion of me-too drugs, trivial reformulations, and new diseases invented to fit the drugs available. There is a little real medical progress, but it’s hard-wrung incremental improvements in treatments often based on careful epidemiology (i.e. a lot of trial and error). The reality is closer to the steady state than the vision of Progress.

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