Friday, April 29, 2011 - Medicare As We've Known It Isn't an Option

I agree with the analysis in this article, but I think it misses the larger fact that the average senior gets about 3 times more benefits from Medicare than they contributed.  This fact alone should show that Medicare is unsustainable and must be fixed.  We can help the poor without bankrupting this country, but that requires ending the notion that health care is something we all are “entitled” to from the government. - Opinion: Medicare As We've Known It Isn't an Option


The Democratic Party is urging Americans to choose Medicare as we've always known it rather than a new plan by Rep. Paul Ryan (R., Wis.) that would enroll seniors in private health insurance beginning in 2022. This choice is a hoax: Medicare as we've always known it is already gone. It was eviscerated by President Obama's health law. The 2012 election could turn on this falsehood.

The truth is that the Obama health law reduces future funding for Medicare by $575 billion over the next 10 years and spends the money on other programs, including a vast expansion of Medicaid.

The fact is that Mr. Obama's law raids Medicare. Mr. Ryan's plan, on the other hand, stops the Medicare heist and puts the funds "saved" in this decade toward health care for another generation of retirees.

So what can retiring Americans count on in 2022 and after? The Obama health law leaves that up to an unelected board of presidential appointees called the Independent Payment Advisory Board, a cost-cutting panel.

The board is a radical departure from Medicare as we've known it. Congress cedes nearly all control of Medicare spending to the board on the rationale that budgeting decisions should be shielded from outraged seniors and political pressures. On April 13, the president reiterated that the board would decide what care is "unnecessary" for seniors. Even the CBO cautioned that as the nation's debt crisis worsens, benefits will be put on the board's chopping block.




Thursday, April 28, 2011 - The Gas Price Freakout - Opinion: The Gas Price Freakout


Mr. Obama usually begins his gas price narrative, now a campaign trail staple, by explaining that there aren't easy solutions. That's true—there's not a lot the political class can do to change gas prices in the short run—but then the President goes on to mention that there happens to be one easy solution: raising taxes on the oil and gas industry. This is also his stock answer on the budget deficit, world hunger and everything else. The junk economic theory is that increasing the U.S. costs of investor-owned oil producers—which together hold a mere 6% of world reserves—is supposed to lower the price of a global commodity.

The liberal drive to tax Big Oil is rooted in an ideological commitment to higher energy prices, not consumer relief.

Rising gas prices are stealing the gains of middle-income voters, so this is an important debate to have. Too bad Mr. Obama's Washington can't seem to escape the energy incoherence—phantom speculators, easy villains—of his predecessors.




Monday, April 25, 2011 - When Big Government Goes to College - Opinion: When Big Government Goes to College


The more the feds try to lower the cost, the worse the problem becomes.

"Right now the incentives for our colleges and universities are all wrong.  It's wrong for colleges, who have no incentive to keep down costs. It's wrong for students, whose needs are ill-served by loans and grants that go directly to the school. And it's wrong for taxpayers, whose dollars are making education more expensive without expanding opportunity for those who most need it."

Translation: If you are a mom or dad with college-age kids and you think the system is rigged against you, you're right.

A good start would be a new structure for college financing that promoted genuine opportunity without feeding the inflation it is supposed to solve. President Obama, alas, seems wed to the same government-heavy approach he had for health care. Indeed, the "reform" he signed last spring—restructuring federal grants and loans—will likely fuel rising costs as schools absorb that money, spend it on their own priorities, and continue to raise tuition at rates that outstrip the Consumer Price Index.

That's unfortunate because with a little imagination and the right incentives, the possibilities are endless.




Thursday, April 21, 2011 - The Other Medicare Cutters - Opinion: The Other Medicare Cutters


The debate over Paul Ryan's Medicare reform ideas has largely been healthy, even amid the liberal distortions. But why has there been so little scrutiny of President Obama's new Medicare proposal? Anyone worrying about more individual choice and responsibility in health care might be interested to learn that the alternative is turning every one of these decisions over to a 15-member central committee.

It sounds absurd, but there the President was last week, gravely conceding Mr. Ryan's analysis of Medicare's balance sheet and then claiming that the solution is to give a lot more political power to an unelected board to control health costs. Democrats believe this board will play doctor and actuary and allocate health resources better than markets, so allow us to fill in some of the details of this government-planned future.


Messrs. Ryan and Obama agree that Medicare spending must decline, and significantly. The difference is that Mr. Ryan would let seniors decide which private Medicare-financed insurance policies to buy based on their own needs, while Mr. Obama wants Americans to accept the commands of 15 political appointees who will never stand for election.





Monday, April 18, 2011 - The 30-Cent Tax Premium

A double dose of tax articles today – but don’t start to expect it J - Opinion: The 30-Cent Tax Premium


Taxpayers must spend significantly more than $1 in order to provide $1 of income-tax revenue to the federal government.

To start with, individuals and businesses must pay the government the $1 in revenue plus the costs of their own time spent filing and complying with the tax code; plus the tax collection costs of the IRS; plus the tax compliance outlays that individuals and businesses pay to help them file their taxes.

In a study published last week by the Laffer Center, my col leagues Wayne Winegarden, John Childs and I estimate that these costs alone are a staggering $431 billion annually. This is a cost markup of 30 cents on every dollar paid in taxes. And this is not even a complete accounting of the costs of tax complexity.

Like taxes themselves, tax-compliance costs change people's behavior. Taxpayers, whether individuals or businesses, respond to taxes and tax-compliance costs by changing the composition of their income, the location of their income, the timing of their income, and the volume of their income.

Citizens should be able to comply with the tax code without having to spend absurd amounts of money to do so. The fact that there is such a large compliance markup in our tax s ystem indicates that the tax system has gone awry. All of these hours could have been used for something a lot more productive than just making sure our taxes are filed and paid correctly.

 - Where the Tax Money Is

Happy Tax Day!  A lot of numbers in this article, but the point is we cannot solve our deficit problems by taxing “the rich.”  We either limit the spending on entitlements, or we significantly raise taxes on the middle class. - Opinion: Where the Tax Money Is


The mathematical reality is that in the absence of entitlement reform on the Paul Ryan model, Washington will need to soak the middle class—because that's where the big money is.

Mr. Obama's game has always been to pretend not to increase taxes for middle class voters while looking for sneaky ways to do it.

Mr. Obama's speech was disgraceful for its demagoguery but also because it contained nothing remotely commensurate to the scale of the problem. If the President had come out for a large tax on the middle class, like a VAT, then at least the country could have debated the choice of paying for the government we have or modernizing it a la Mr. Ryan so it is affordable.

Instead the President will continue targeting the middle class for tax increases to pay for an entitlement state on autopilot, while claiming he only wants to tax the rich.




Wednesday, April 13, 2011 - We've Become a Nation of Takers, Not Makers - Opinion: We've Become a Nation of Takers, Not Makers


More Americans work for the government than work in construction, farming, fishing, forestry, manufacturing, mining and utilities combined. We have moved decisively from a nation of makers to a nation of takers. Nearly half of the $2.2 trillion cost of state and local governments is the $1 trillion-a-year tab for pay and benefits of state and local employees. Is it any wonder that so many states and cities cannot pay their bills?

The employment trends described here are explained in part by hugely beneficial productivity improvements in such traditional industries as farming, manufacturing, financial services and telecommunications. These produce far more output per worker than in the past. The typical farmer, for example, is today at least three times more productive than in 1950.

Where are the productivity gains in government? Consider a core function of state and local governments: schools. Over the period 1970-2005, school spending per pupil, adjusted for inflation, doubled, while standardized achievement test scores were flat. Over roughly that same time period, public-school employment doubled per student. That is what economists call negative productivity.

Most reasonable steps to restrain public-sector employment costs are smothered by the unions. Study after study has shown that states and cities could shave 20% to 40% off the cost of many services—fire fighting, public transportation, garbage collection, administrative functions, even prison operations—through competitive contracting to private providers. But unions have blocked many of those efforts. Public employees maintain that they are underpaid relative to equally qualified private-sector workers, yet they are deathly afraid of competitive bidding for government services.



Monday, April 11, 2011 - Is It Immoral To Cut The Budget?

[Regarding a full-page ad published by a progressive evangelical Christian group that recasts the budget battle as a morality play.] - Opinion: Is It Immoral To Cut The Budget?


"We the People" constituted ourselves for the several reasons set forth in our Constitution's Preamble, but chief among those—the reason we fought for our independence—was to "secure the Blessings of Liberty to ourselves and our Posterity." Yet nowhere today is that liberty more in jeopardy than in a federal budget that reduces us all, in so many ways, to government dependents.

Our tax system sucks the substance and spirit of entrepreneurs and workers alike, filters that substance through Washington, then sends it back through countless federal programs that instruct us in minute detail about how to use the government's beneficence. Manufacturing, housing, education, health care, transportation, energy, recreation—is there anything today over which the federal government does not have control? A federal judge held recently that Congress can regulate the "mental act" of deciding not to buy health insurance.

The budget battle is thus replete with moral implications far more basic than Sojourners and Catholics for Choice seem to imagine. They ask, implicitly, how "we" should spend "our" money, as though we were one big family quarreling over our collective assets. We're not. We're a constitutional republic, populated by discrete individuals, each with our own interests. Their question socializes us and our wherewithal. The Framers' Constitution freed us to make our own individual choices.

The ads' signers imagine that the Good Samaritan parable instructs us to attend to the afflicted through the coercive government programs of the modern welfare state. It does not. The Good Samaritan is virtuous not because he helps the fallen through the force of law but because he does so voluntarily, which he can do only if he has the right to freely choose the good, or not.

Americans are a generous people. They will help the less fortunate if left free to do so. What they resent is being forced to do good—and in ways that are not only inefficient but impose massive debts upon their children. That's not the way free people help the young and less fortunate.

And it's not as if we were bereft of a plan for determining our priorities as a nation. Our Constitution does that quite nicely. It authorizes a focused but limited public sector, enabling a vast private sector of liberty. But early 20th-century Progressives— politicians and intellectuals alike—­deliberately shifted that balance. Today the federal government exercises vast powers never granted to it, restricting liberties never surrendered. It's all reflected in the federal budget, the redistributive elements of which speak to nothing so much as theft—and that's immoral.





Friday, April 8, 2011 - Medicare for a New Century - Opinion: Medicare for a New Century


Liberals seem delighted that Paul Ryan and the GOP have decided to charge the fixed bayonets of Medicare reform, denouncing the new House budget as a crime against seniors, humanity, and so on. Republicans are taking a huge political risk, but they are now setting the reform agenda, and their honesty may even oblige a national debate about the future of an entitlement state that can't survive in its current form.

Mr. Ryan's core insight is that Medicare needs to be modernized if it is to survive. The federal insurance program for the elderly has barely changed since 1965, several health-care revolutions and trillions of misspent tax dollars ago. The GOP plan—known as premium support—would rationalize Medicare's burden on taxpayers, while introducing market competition to control costs.

As Democrats build their re-election bids around Mediscare demagoguery, they're pretending that the choice is between "privatization" and a free lunch. Mr. Ryan has done a service in exposing this illusion. Nothing will sooner finish off "Medicare as we know it" than to continue its present march into insolvency.

The reality that Mr. Ryan has recognized is that Medicare can't be fixed with nips and tucks. Premium support is easily as important an advance as the shift from defined-benefit pensions to 401(k)s, and the transition could be as smooth.





Wednesday, April 6, 2011 - After the Welfare State - Opinion: After the Welfare State


That crashing sound you hear? It's the sound of welfare states in collapse. From Albany to Athens, all but the dimmest observers now recognize that the model we've been following has run aground—morally, socially and fiscally. Less clear is what's going to replace it.

Today, House Budget Committee Chairman Paul Ryan gives a hint at the possibilities. Over the next few weeks, the Beltway will consume itself defending or defenestrating his numbers and projections. Yet Mr. Ryan's budget is less about dollars and cents than the assumption behind them: that the best way to help Americans is to increase their access to the market rather than try to shield them from it.

Alas, bringing the middle classes into government programs has been a key aim of the social democratic state. We all know that has helped raise the financial costs to levels we can no longer afford. The moral and social price of expanding government, however, has been even more costly.

Ironically, in their obsession with government, American liberals continue to overlook their greatest strength: their ability to set goals for our society. Whether it be increasing access to good housing, a dignified retirement, or a decent education for every child, liberals have won most of the arguments.

What conservatives like Mr. Ryan and Mr. Levin offer here is a better "how"—a road map that lets us balance our care for fellow citizens without wrecking the economy, ruining families, or giving birth to more soulless bureaucracies.

Liberals tend to oppose even these improvements. Sadly, they've become wed to the welfare state's most debilitating premise—that the sole provider for some of the most important goods and services must be the most inefficient institution in American life: the government.