Friday, April 08, 2011

Oh No, The Government May Have to Let Go of Non-Essential People. Who Will Save Us?



Charles Krauthammer

After Ryan’s leap, a rush of deficit demagoguery

The conventional line of attack on Ryan’s plan is already taking shape: It cuts poverty programs and “privatizes” Medicare in order to cut taxes for the rich. Major demagoguery on all three counts.
(1) The reforms of the poverty programs are meant to change an incentive structure that today perversely encourages states to inflate the number of dependents (because the states then get more “free” federal matching money) and also encourages individuals to stay on the dole. The 1996 welfare reform was similarly designed to reverse that entitlement’s powerful incentives to dependency. Ryan’s idea is to extend the same logic of rewarding work to the non-cash parts of the poverty program — from food stamps to public housing.
When you hear this being denounced as throwing the poor in the snow, remember that these same charges were hurled with equal fury in 1996. President Clinton’s own assistant health and human services secretary, Peter Edelman, resigned in protestpredicting that abolishing welfare would throw a million children into poverty. On the contrary. Within five years child poverty had declined by more than 2.5 million — one of the reasons the 1996 welfare reform is considered one of the social  policy successes of our time.
(2) Critics are describing Ryan’s Medicare reform as privatization, a deliberately loaded term designed to instantly discredit the idea. Yet the idea is essentially to apply to all of Medicare the system under which Medicare Part D has been such a success: a guaranteed insurance subsidy. Thus instead of paying the health provider directly (fee-for-service), Medicare would give seniors about $15,000 of “premium support,” letting the recipient choose among a menu of approved health insurance plans. Call this privatization if you like, but then would you call the Part D prescription benefit “privatized”? If so, there’s a lot to be said for it. Part D is both popular and successful. It actually beat its cost projections — a near miraculous exception to just about every health-care program known to man.
Under Ryan’s plan, everyone 55 and over is unaffected. Younger workers get the insurance subsidy starting in 2022. By eventually ending the current fee-for-service system that drives up demand and therefore prices, this reform is far more likely to ensure the survival of Medicare than the current near-insolvent system.
(3) The final charge — cutting taxes for the rich — is the most scurrilous. That would be the same as calling the Ronald Reagan-Bill Bradley 1986 tax reform “cutting taxes for the rich.” In fact, it was designed for revenue neutrality. It cut rates — and for everyone — by eliminating loopholes, including corrupt exemptions and economically counterproductive tax expenditures, to yield what is generally considered by left and right an extraordinarily successful piece of economic legislation.
Ryan’s plan is classic tax reform — which even Obama says the country needs: It broadens the tax base by eliminating loopholes that, in turn, provide the revenue for reducing rates. Tax reform is one of those rare public policies that produce social fairness and economic efficiency at the same time. For both corporate and individual taxes, Ryan’s plan performs the desperately needed task of cleaning out the myriad of accumulated cutouts and loopholes that have choked the tax code since 1986.
Ryan’s overall plan tilts at every windmill imaginable, including corporate welfare and agricultural subsidies. The only thing left out is Social Security. Which proves only that Ryan is not completely suicidal.
But the blueprint is brave and profoundly forward-looking. It seeks nothing less than to adapt the currently unsustainable welfare state to the demographic realities of the 21st century. Will it survive the inevitable barrage of mindless, election-driven, 30-second attack ads (see above)? Alternate question: Does Obama have half of Ryan’s courage?
I think not (on both counts). But let’s hope so.

54 comments:

  1. Brent Crude is selling on the Spot Market for $126.00 and change.

    Tapis closed out at $131.81

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  2. The National Parks will be closed to the public, if there is no budget agreement. So much for the "right" to see and use that part of the American heritage the Federals are protecting, with the socialized stewardship of the western lands.

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  3. Small oil drillers say new rules threaten wildcatters' survival
    By Rick Jervis, USA TODAY

    No space for small business when dealing with the Federals.

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  4. To correct something from the other thread: Being a "Peak Oiler" does Not make one a "Malthusian."

    I, personally, believe we're at, or very near, the highest rate of oil flow that we'll ever see. I Am Not, in any way shape or form, a "Malthusian."

    I believe that "once we get our heads out of our asses" we can replace oil quite nicely. I just think that prevailing politics will cause us to experience a Very Bumpy Ride for the next Decade, or so.

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  5. The National Parks will be closed to the public, if there is no budget agreement

    That's a shame, because I'll suddenly have the time to go visit them. Oh well. When I start increasing the throughput of my posts to the EB this coming week, at least no one can accuse me of misusing gummint resources..

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  6. It's Not how much they produce; it's how much they Export.

    Saudi Arabia, explained

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  7. What Would Jesus Do With The Koran?

    Author is an interesting fellow.

    All is not lost Miss T. You could come to Idaho and shoot a wolf, and you have all that National Forest land waiting for you and Miss Fely. Plenty of free roaming there and the best of land and stream scapes. Also hot springs galore in which to soak.

    dwr

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  8. Louisiana Sweet selling for $127.00/bbl.

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  9. Thank God for all that Saudi "Spare" Capacity. I'm sure it'll start hitting the market any time now. Right?

    I think that embargoed Iranian oil has finally "run through" the market, and, now, "the game begins."

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  10. The National Parks probably need a rest anyway. Anyway, why should they be closed just because the toll booths are unmanned?

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  11. Security, Deuce, for public safety reasons, of course.

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  12. Security in the parks. That is true, when I hunted and fished the Pennsylvania wilderness I always required a police escort to really savor the outdoor experience.

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  13. Obama allows us to pack heat in the parks now, no?

    dwr

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  14. The only way the good old Iddaho Legislature could have improved on the wolf bill recently passed would have been to put a bounty on 'em and make it a legal dutys to shoot the sons a bitches. :)

    dwr

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  15. As I wuz sayin'.

    RFA CEO and President Bob Dinneen notes that global corn production is looking stronger than many were expecting. “In particular, production in South America and Africa has been robust. Farmers in countries like Uganda are responding to higher world prices by increasing production through the use of better technology and improved farming practices. Higher prices are allowing farmers in sub-Saharan Africa and other regions to participate in the world market and likely many of them are earning a profit on their crops for the first time in years,” he said.

    Not Catastrophe

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  16. The entertainement people are against cuts supporting the arts. Let's put an entertainment surtax on them to help them out with their civic concerns.

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  17. Louisiana Sweet selling for $127.00/bbl.

    Gold hit record highs on Friday and silver its strongest since early 1980 as the dollar slid to 15-month lows versus the euro, with concerns over euro zone debt and unrest in the Middle East region further supporting buying.

    Using Rufus-logic, we must be at peak gold and silver production too, and peak euro, and peak food.

    Hello? It's a sliding dollar.

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  18. .

    Weak dollar and speculation.

    Near the end of January, the price of oil jumped from $86 to about $90 in one day due to worry over the Egyptian situation. That was one day.

    Since then there have been riots all over the ME and the speculators have taken over. For about $50,000 one trader can control up to $1 million in oil contracts for a day. They can control it 10:1 for more than a day. And they don't actually ever have to take possession of the oil.

    Those who believe the prices have risen to the level they are now (in a two month period) due to an actual shortage of crude is at best bemused.

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  19. .

    "...are at best bemused..."

    .

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  20. Heh, that's interesting; it seems Gold Production Peaked in 2001.


    Well, there ya go. :)

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  21. You guys have your "cause, and effect" bolloxed up. Trade Balance is, by far, the most important factor in the "Value of the Currency."

    When Oil rises $10.00/bbl our trade balance takes an approximate $40 Billion/Yr hit.

    A rise in the cost of Brent Crude from $85.00 to $125.00/bbl increases our Trade Deficit by $160 Billion/Yr.

    Hence, the "sliding" dollar.

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  22. This is the problem with the "Kudlow Republicans" (also known as "Dumbfucks.")

    They want their shares of Exxon to rise, AND they want a "Stronger Dollar."

    Exxon makes most of its money "importing" and refining "impoorted" oil. Oil Imports lead to a Weakening Dollar.


    Intellecual Discordancy, your name is "Republican."

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  23. Oh, and Don't start. I'm not saying the run up in Gold is a result of "peak gold." I just thought it was kind of amusing, in an ironic sort of way.

    The run-up in Gold is a result of it being a perceived store of value against crappy, fiat currencies.

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  24. Q, if you were an oil buyer, and you saw the Libyan Oil Fields burning, and Saudi Arabia NOT stepping up to the plate, what would YOU do?

    Would you be inclined to "get your order in, now?"

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  25. You guys have your "cause, and effect" bolloxed up.


    The only man I know that posits that high crude prices cause a weak U.S. dollar rather than vice versa.

    Evidently, the huge U.S. deficits, Big Ben's quantitative easing and zero percent interest rates have nothing to do with it.

    It's all about the oil. But then, isn't everything?

    Fixation: a preoccupation with one subject, issue, etc.; obsession

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  26. .

    Q, if you were an oil buyer, and you saw the Libyan Oil Fields burning,

    Hard to say. I haven't seen any Libyan oil fields burning.

    Get back to me when they do.

    .

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  27. Think about it, Q; if the dollar moved 10%, and oil moved 40%, what was moving what?

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  28. It's been all over CNBC today, Q.

    There was an article a couple of days, ago, that the rebels had destroyed some of the Eastern Libya oil infrastructure.

    Then, we have memories of what the Iraqis did to the Iraqi infrastructure in just a couple of weeks of Iraqi Freedom.

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  29. .

    How many times do I have to tell you. It's the speculators driving up the price.

    Go look up the term post hoc, ergo propter hoc then revisit the definition of fixation.

    .

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  30. Three oilfields with a combined output of 400,000 barrels a day have been targeted by Qaddafi’s troops, Barclays analysts led by London-based Amrita Sen, said in a report. Production would be less than a third of its pre-conflict level even if the rebels took control of the country’s fields, Nomura Holdings Inc. said in a report.

    “Libya is down for the count,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. “Kuwait is the only country to come back 100 percent after a major disruption over the last 30 years. Iran, Iraq and Venezuela haven’t been able to get back to pre-disruption production levels, so the outlook for Libya isn’t promising.”


    Bloomberg article

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  31. "after this, therefore, because of this"

    I corrected the punctuation for you. :)

    Kind of like, "Oil Supply quits growing in the presence of increasing demand, THEREFORE, Prices Begin to Rise?"

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  32. Warning about pronouncements of "Logical Fallacy."

    Just because something Can Be a logical fallacy doesn't mean it is.

    "Cause, and effect" is Not, necessarily a "logical fallacy."

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  33. Ex. If I saw you dead drunk at a party, and learned later that you had had a wreck on your way home, it would be a logical fallacy to assume the two were connected; but I know which way I'd bet.

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  34. .

    Likewise your arguments that it is the GOP that is trying to destroy the ethanol industry. The way you phrase it it's only the GOP. That's rediculous.

    Everyone has a hand in it.

    I read the other day that Shell set up a joint venture with some company to produce ethanol. I think it was from corn cops and such although I'm not sure. Anyway, got the oil guys, you dispise involved. They have the money which takes care of that problem.

    The problem they couldn't overcome, they couldn't get a permit. Obama and the Dems control the bureaucracy. Hard to blame that on the GOP.

    And it wasn't just the U.S. The JV went to Canada but are having a hard time getting a permit there.

    Then you have the enviro nuts who are fighting the alternative fuel initiatives as much as they are fighting the oil companies. Now that they have made their own money they want to move the U.S. back to some pastoral past with a reduced population and horse and buggy transportation.

    Them of couse you have NIMBY and much of the population fighting having these places put up near them.

    And of course, there's...
    But why go on?

    To meet the targets that have been set for alternative fuels, we would need a government managed like China is.

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  35. It may be a logical fallacy to say, "the oil infrastructure was left unguarded, thus the Libyans have probably looted it,"

    but, I think the oil buyers are trading on the possibility.

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  36. .

    The last I heard Libya can supply about 2% of world oil production.

    2%

    .

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  37. .

    but, I think the oil buyers are trading on the possibility.

    Yea, Ruf.

    And that's called speculation.

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  38. That Shell story is pretty much bullshit.


    Nah, Q, it's pretty much the Republicans.

    Admittedly, a couple of Dems, but mostly Pubs.

    And, I have referenced (many times) the eco-nuts. Obama's EPA is ate up with them.

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  39. But, right now, it's mostly the Pubs.

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  40. .

    That Shell story is pretty much bullshit.

    Isn't everything that doesn't fit your line?

    .

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  41. 2% can be a big number, Q. When your margin for error is 1%.


    Besides, it was, as much (or more) as anything, the failure of the Sauds to make good on their boasts of huge excess capacity.

    Peaker nuts like me have been saying all along that their claims were nonsensical, but people really, and truly, wanted to "Believe."

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  42. .

    Peaker nuts like me have been saying all along that their claims were nonsensical, but people really, and truly, wanted to "Believe."

    I don't want to believe.

    It is what it is.

    That's why I don't understand you giving us various oil prices daily. We can see numbers that are much more important to us everytime we fill up, which I did today.

    .

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  43. Q, I've been following Shell's gyrations with Iogen for years.

    They have spent a little time, and capital trying to produce a "Proprietary" process, but, mostly it's been more for "show" than anything else.

    They weren't trying to get "permits;" they were trying to get "Grants." First Idaho, then they said they got a better offer somewhere in Canada, and yada, yada,

    Their deal was wheat straw.

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  44. Fuck, Q, if you don't want to know, Don't read the fucking comment.

    Scroll, Goddammit, Scroll.

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  45. .

    Right Ruf.

    Well, it's been fun but my dog is giving me the look and I have to go.

    Keep worrying about them oil prices though. I'm sure it will help.

    .

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  46. I'm essential, I report to work on Monday. Neener neener.

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  47. Must be fun, T. I can't remember what it feels like. :)

    Well, congratulations.

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  48. T, I thought you would be interested in this site I found in my travels.

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  49. .

    Back on topic.

    Charles Krauthammer is a dick.

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  50. .

    You have to give Paul Ryan credit for laying out a 'specific' budget plan with actual proposals in it that can be quantified. In addition, he does what he said he would do, offer proposals that would actually start bringing the deficit down.

    That's better than most in either party have done in years.

    All that being said, while I applaud his guts in laying out a tough budget proposal, I don't agree with many of his proposals or in the way he gets his savings.

    In addition, he was not perfectly candid. He says he would offset the lower taxes he proposes by doing away with existing tax loopholes; yet he doesn't spell out what those loopholes are.

    All in all, I would give him a C+.

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  51. .

    If we were grading on the curve, I'd have to give him a B+.

    .

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