Sunday, November 25, 2012

The money it's about

Sportswriters like to remind their readers that when somebody says "It's not about the money", they're usually lying. Occasionally, a veteran hungry for a ring will sign for somewhat less than they could get elsewhere to have a shot/be with their friends/get away from some idiots, etc, but those cases are pretty rare.

Likewise, when you read about principles in legislative battles, you're getting the banal prolefeed.

Our go-to guy for banal prolefeed, Stephen Ohlemacher, has produced a characteristically useless roundup of what we're supposed to think is at stake in the current & endless budget struggles. No numbers, lots of conventional wisdom. Same old same old about Erskine-Bowles.

Lawmakers and the White House are working in a postelection session of Congress to reduce the sudden jolt of higher taxes and spending cuts and lay a framework for addressing the nation's long-term financial problems. But the two political parties are struggling to find common ground, especially on taxes and widely popular benefit programs such as Social Security and Medicare.

So careful. So balanced. So useless. And this unspeakable tripe:

It's a familiar refrain — almost everyone acknowledges that money has to be cut, no one wants it to be theirs

There are a lot of reasons that coverage of budget issues is so bad. Innumerate reporters and editors. Owners and advertisers with thumbs on the scale. Class warfare so ugly that most people simply refuse to believe in it.

Another one is that economic discussion in the US is always about encouraging growth. For a lot of reasons I've talked myself blue about - energy, land, water, climate, developing nations taking sotheir share - growth is just about done. So we're down to fighting over shares. Between inequality, waste, and sheer deliberate cussedness, there's a huge amount of room in the US to make most people's life one heluva lot easier without growth. So that sort of thing is called SOCIALISM, and discussion - even about simple stuff, like drug prices, is verboten.

Alas, the macro that has been taught in the US since the first course has been about growth.  And still, there is complete denial of even the possibility that the party's over - Oooh! We'll make technological progress! Energy is most critical in transit. How is progress running in transportation? The last B-52 came off the line in 1962. The Air Force plans on retiring their B-52s by 2040.

And so, down to details of what's being fought over:

Medicare surtax - 3.8% on investment and 0.9% on earned income over $200,000 is about $20 billion a year, but hits a limited target, $40,000 or more on very rich people. If you're that rich, it isn't going to affect your consumption.

Social security privatization - This was the Great White Whale of financial advisors who can't do arithmetic. Get their hands on the biggest post of money, ever! Trouble was , when it got turned into legislation, there was one big mutual fund. Pretty soon it would control every corporation in the US. Tiger by the tail?

(Sure, it's absurdly literal, but any excuse to post Buck Owens is good enough for me)

So they content themselves with trying to steal the trust fund. Not getting far. In fact, with the payroll tax reduction in the last 2 years, general revenues have been transferred over to Social Security. Is that a good thing? It's over $90 billion a year, something like $1000/family over 90 million families, so that's been nice. Long term, though,it may increase the chance that Social Security gets thought of as a welfare program, which would make it vulnerable.

Medicare vouchers vs real insurance - the last 2 Republican budgets have had this trillion dollar elevation of theory over reality. The US, based on what we get & what we spend on health care, compared to what everybody else does, overspends by $1 trillion a year. It kills us on competitiveness as surely as it kills thousands of people every year.

The Democratic alternative takes a few steps in the right direction. The infamous $719 billion Medicare cuts are from the waste. Medical loss ratio minimums (which should get raised) are a pretty direct attack on the waste of insurance administration.
Preexisting conditions coverage, and dozens of other provisions of PPACA cut the fear factor. Do we hear about the real reasons for opposition?

Public education funding is another thing getting fought over. Not just university - now the scammers are moving in on secondary schools. Charter schools are big business, and truly scummy.

It's no accident that Charlie Pierce & Keith Olberman came out of sports reporting.

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