Medicare and Mediscares
By PAUL KRUGMAN
Published: May 26, 2011
I’m not feeling particularly motivated today and what it comes down to, is either Paul Ryan is wrong or Paul Krugman is wrong. Can you take a wild guess what side I’m on? Please take a look at the videos above. They basically refute everything Paul Krugman has to say. I’m not surprised Paul writes the way he does. The man proudly proclaims he doesn’t watch cable news. His self imposed bubble keeps videos like the ones above conveniently at bay so when he sits down and writes it’s nothing bu progressive liberal dogma.
I’ll try to chime in throughout this column to call out the blatant lies, misdirection and general lousy economic analysis that IS a Paul Krugman column.
Yes, Paul Ryan, the chairman of the House Budget Committee, is a sore loser. Why do you ask?
To be sure, Mr. Ryan had reason to be upset after Tuesday’s special election in New York’s 26th Congressional District. It’s a very conservative district, so much so that last year the Republican candidate took 76 percent of the vote. Yet on Tuesday, Kathy Hochul, a Democrat, took the seat, with a campaign focused squarely on Mr. Ryan’s plan to dismantle Medicare and replace it with a voucher system.
Actually a Democrat who got on the ballot as a “Tea Party” candidate helped to siphon of votes, but the GOP still ran a sloppy campaign. However, the Democrats did an excellent job of demagoging [sp] the Ryan plan.
I’ll freely say that COULD work in 2012 or it could completely blow up in their faces. And since we are talking about the Democrat party, I’m going to bet it will blow up in their face.
How did Ms. Hochul pull off this upset? Scare tactics The Wisconsin congressman blamed Democrats’ willingness to “shamelessly distort and demagogue the issue, trying to scare seniors to win an election,” and he predicted that by November of next year “the American people are going to know they’ve been lied to.”
Yup, they will. Paul can gloat all he wants right now. Feel free. Go nuts. This is the gloating that took place in 2008 and we know how that worked out 2 years later.
You can understand Mr. Ryan’s bitterness. Bitter? He sounds pretty confident to me. The Democrats are taking a big gamble if all they do is demonize Medicare reform, a gamble they will probably lose. He has, after all, experienced quite a comedown over the course of the past seven weeks. Until his Medicare plan was rolled out in early April he had spent months bathing in warm approbation from many pundits, who had decided to anoint him as an icon of fiscal responsibility. And the plan itself received rapturous praise in the first couple of days after its release.
Then people who actually know how to read a budget proposal started looking at the plan. And that’s when everything started to fall apart.
Coincidentally, that’s when the scare tactics began as well. I’m sure the “people who know how to read a budget” in Krugman’s eyes are completely unbiased.
Mr. Ryan may claim — and he may even believe — that he’s facing a backlash because his opponents are lying about his proposals. But the reality is that the Ryan plan is turning into a political disaster for Republicans, not because the plan’s critics are lying about it, but because they’re describing it accurately.
If Paul were intellectually honest he would say that critics of the plan are doing their best to take it out of context and manipulate what the plan really says.
Take, for example, the statement that the Ryan plan would end Medicare as we know it. This may have Republicans screaming “Mediscare!” but it’s the absolute truth: The plan would replace our current system, in which the government pays major health costs, with a voucher system, in which seniors would, in effect, be handed a coupon and told to go find private coverage.
Ok, ya know what? The phrase “end Medicare as we know it” is technically true and so is the fact that keeping it “as we know it” will bankrupt us. If you change ANYTHING in this world it will “end as we know it.” Funny how making an improvement to ensure Medicare still exists for our seniors now and helping those under 55 to prepare for the change isn’t described as such by the Democrats.
They just say “end Medicare as we know it” and walk away. I’m SURE nobody will wise up to their tactics. Just because we’re changing Medicare doesn’t mean seniors will be hurt by it and THAT is what Democrats are telling voters.
The new program might still be called Medicare — hey, we could replace government coverage of major expenses with an allowance of two free aspirins a day, and still call it “Medicare” — but it wouldn’t be the same program. And if the cost estimates of the Congressional Budget Office are at all right, the inadequate size of the vouchers — which by 2030 would cover only about a third of seniors’ health costs — would leave many if not most older Americans unable to afford essential care.
Medicare “as we know it” is a blank check that is a direct part of the increase in costs. By switching to a voucher system it will directly help to reduce actual costs.
If anyone is lying here, it’s Mr. Ryan himself, who has claimed that his plan would give seniors the same kind of coverage that members of Congress receive — an assertion that is completely false.
Ok, that’s pretty straight forward. Someone is not telling the truth. What’s the name of the website you’re reading right now?
And, by the way, the claim that the plan would keep Medicare as we know it intact for Americans currently 55 or older is highly dubious. True, that’s what the plan promises, but if you think about the political dynamics that would emerge once Americans born a year or two too late realize how much better a deal slightly older Americans are getting, you realize that this is a promise unlikely to be fulfilled.
Americans are mature and grown up enough to handle the realities of what is going on with our country. They know we have to tackle entitlement reform. They know plans like Medicare won’t be there for them if they continue on as they are. They know men like Paul Krugman are not telling the truth.
Still, are Democrats doing a bad thing by telling the truth about the Ryan plan? “If you demagogue entitlement reform”, says Mr. Ryan, “you’re hastening a debt crisis; you’re bringing about Medicare’s collapse.” Maybe he should have a word with his colleagues who greeted the modest, realistic cost control efforts in the Affordable Care Act with cries of “death panels.”
As long as we’re being honest here, do you think Krugman conveniently forgot to mention Obamacare (Affordable Care Act) strips Medicare of $500 Billion? I’m sure it just slipped his mind.
Anyway, the underlying premise behind statements like that is the assumption that the Ryan plan represents a serious effort to come to grip with America’s long-run fiscal problems. But what became clear soon after that plan was unveiled was that it was no such thing. In fact, it wasn’t really a deficit-reduction plan. Once you remove the absurd assumptions — discretionary spending, including defense, falling to Calvin Coolidge levels, and huge tax cuts for corporations and the rich, with no loss in revenue? — it’s highly questionable whether it would reduce the deficit at all.
You follow that logic? On one hand Krugman thinks it will decimate Medicare (major driver of our budget) and on the other that decimation still won’t be enough to fix our budget problems.
This man won the Nobel Prize.
What the Ryan plan is, instead, is an attempt to snooker Americans into accepting a standard right-wing wish list under the guise of deficit reduction. And Americans, it seems, have seen through the deception.
So what happens now? The fight will shift from Medicare to Medicaid — a program that has become an essential lifeline for many Americans, especially children, but which in the Ryan plan is slated for a 44 percent cut in federal aid over the next decade. At this point, however, I’m optimistic that this initiative will also run aground on popular disapproval.
It may. OR people will realize we are on an unsustainable path all the while the Democrats are name calling. I’m not underestimating the American people even though Paul Krugman is.
What of Mr. Ryan’s hope that voters will realize that they’ve been lied to? Well, as I see it, that’s already happening. And it’s bad news for the G.O.P.
For some reason all I can think of right now is the quote: “Barack Obama is the greatest thing to happen to the conservative movement since Ronald Reagan.”
I can’t remember who said it! Hahaha!
From the Boston Herald: ”On the more libertarian side, there’s Rep. Ron Paul of Texas and former New Mexico Gov. Gary Johnson. If those two have their way, the dollar will not only be backed by gold, it will be printed on paper made from hemp.” – Jonah Goldberg
This made me laugh out loud!
When Austerity Fails
By PAUL KRUGMAN
Published: May 22, 2011
The title of this article is “When Austerity Fails” which might lead you to believe that the U.S. government is actually practicing that. It is not. We are still spending more money than we ever have. We would still have a deficit (of $700 Billion) even if Obama had raised taxes this year. We as a nation are deficit spending almost as much as our entire budget in 2000.
Somehow Paul Krugman would have the world believe that economic laws which apply to businesses and individuals don’t apply to the government. They do.
It’s not really Paul’s fault in a sense. He’s just been taught the wrong things. Keynesian economics. He’s never been in business. He ignores numerous historical examples that prove the Keynesian myth wrong. And he sticks to this ideology that will cause further economic ruin if implemented into policy.
Oh, and he arrogantly calls anyone who disagrees with the liberal progressive Keynesian vision of the world, stupid.
I often complain, with reason, about the state of economic discussion in the United States. And the irresponsibility of certain politicians — like those Republicans claiming that defaulting on U.S. debt would be no big deal — is scary.
Let’s get one thing clear. Inability to pay back one’s debts results in default, not capping the total amount borrowed. The debt limit is a self imposed restriction and pretty soon if Paul gets his way we will have limits imposed on us by our creditors. What do you think is a better position to get our fiscal house in order? By choice now or no choices when we spend ourselves into oblivion?
But at least in America members of the pain caucus, those who claim that raising interest rates and slashing government spending in the face of mass unemployment will somehow make things better instead of worse, get some pushback from the Federal Reserve and the Obama administration.
Slashing spending, then slashing taxes WILL lower unemployment and make things better and since interest rates are near zero they can only go up. We all know how Paul has been denying inflation for the past year at least and in spite of all the Fed’s best efforts, interest rates have not gone down and most market borrowing rates have gone up.
In Europe, by contrast, the pain caucus has been in control for more than a year, insisting that sound money and balanced budgets are the answer to all problems. How dare those fools! “Balanced budgets” is such an undereducated concept in Paul’s mind, he must stick his nose up at this. Underlying this insistence have been economic fantasies, in particular belief in the confidence fairy — that is, belief that slashing spending will actually create jobs, because fiscal austerity will improve private-sector confidence.
As opposed to more government spending which has worked out SO well? This is nonsense. Whatever capital is not in the hands of the government is in the private sector, but Paul Krugman thinks the government is best suited to allocate and centrally plan an economy. Krugman is wrong.
See this is where the Europeans are also wrong. They think that by raising tax rates they’ll collect more revenue which will in turn, pay their debts. The truth is that the amount of revenue ANY government collects has more to do with the health of the economy rather than the rate at any given moment.
So when Europeans raise rates they pull more money out of the private sector and the economies slow down. Funny how Paul usually leaves out the part where the Europeans raise taxes, huh.
Unfortunately, the confidence fairy keeps refusing to make an appearance. And a dispute over how to handle inconvenient reality threatens to make Europe the flashpoint of a new financial crisis.
You have to laugh at an intellectual know-nothing like Krugman trying to belittle common sense with phrases like “confidence fairy.” I know he thinks he’s being funny with his condescending remarks, but it only makes him look more foolish.
After the creation of the euro in 1999, European nations that had previously been considered risky, and that therefore faced limits on the amount they could borrow, began experiencing huge inflows of capital. After all, investors apparently thought, Greece/Portugal/Ireland/Spain were members of a European monetary union, so what could go wrong?
The answer to that question is now, of course, painfully apparent. Greece’s government, finding itself able to borrow at rates only slightly higher than those facing Germany, took on far too much debt. “Took on” too much debt? How does that happen? They just “take” it? Ummm, nope, they SPEND too much. The governments of Ireland they bailed out their banks and Spain not true, Spain DID. You can’t have a budget deficit unless you spend too much didn’t (Portugal is somewhere in between) — but their banks did, and when the bubble burst, taxpayers found themselves on the hook for bank debts. The problem was made worse by the fact that the 1999-2007 boom left prices and costs in the debtor nations far out of line with those of their neighbors.
What to do? European leaders offered emergency loans to nations in crisis, but only in exchange for promises to impose savage austerity programs, mainly consisting of huge spending cuts. Objections that these programs would be self-defeating — not only would they impose large direct pain, but they also would, by worsening the economic slump, reduce revenues — were waved away. Austerity would actually be expansionary, it was claimed, because it would improve confidence.
Not really, this is another false premise Paul pulls out of obscurity. The “confidence fairy” is something he is pretending takes precedence over common sense and logic. Governments shouldn’t spend more money than they take in, it’s just that simple.
Nobody bought into the doctrine of expansionary austerity more thoroughly than Jean-Claude Trichet, the president of the European Central Bank, or E.C.B. Under his leadership the bank began preaching austerity as a universal economic elixir that should be imposed immediately everywhere, including in countries like Britain and the United States that still have high unemployment and aren’t facing any pressure from the financial markets.
But as I said, the confidence fairy hasn’t shown up. Maybe Tinker Bell doesn’t like higher taxes? Europe’s troubled debtor nations are, as we should have expected, suffering further economic decline thanks to those austerity programs, and confidence is plunging instead of rising. It’s now clear that Greece, Ireland and Portugal can’t and won’t repay their debts in full, although Spain might manage to tough it out.
Let’s follow Paul’s logic for a second. What SHOULD Greece have done? Spend even more? Borrow even more? Raise taxes by 75%? Would those steps instill more or less confidence in those countries?
Those are the alternatives. It’s pretty straightforward. Those countries spent too much and now they have to spend less.
Realistically, then, Europe needs to prepare for some kind of debt reduction, involving a combination of aid from stronger economies and “haircuts” imposed on private creditors, who will have to accept less than full repayment. Realism, however, appears to be in short supply.
Wait, in order to get rid of their debt Paul Krugman thinks that debtors should borrow more AND not pay it! Paul Krugman won the Nobel Prize.
On one side, Germany is taking a hard line against anything resembling aid to its troubled neighbors, even though one important motivation for the current rescue program was an attempt to shield German banks from losses.
On the other side, the E.C.B. is acting as if it is determined to provoke a financial crisis. It has started to raise interest rates despite the terrible state of many European economies. And E.C.B. officials have been warning against any form of debt relief — in fact, last week one member of the governing council suggested that even a mild restructuring of Greek bonds would cause the E.C.B. to stop accepting those bonds as collateral for loans to Greek banks. This amounted to a declaration that if Greece seeks debt relief, the E.C.B. will pull the plug on the Greek banking system, which is crucially dependent on those loans.
This is the level of economic analysis from the left. Any attempts to reduce the size and scope of government means they’re “provoking a financial crisis.” Whew, is it too early for a martini?
If Greek banks collapse, that might well force Greece out of the euro area — and it’s all too easy to see how it could start financial dominoes falling across much of Europe. So what is the E.C.B. thinking?
My guess is that it’s just not willing to face up to the failure of its fantasies. And if this sounds incredibly foolish, well, who ever said that wisdom rules the world?
The fantasy that Paul is under is that anyone can centrally plan an economy and governments are somehow immune from the economic laws that those of us with a brain and common sense know to be true.
