Alan Simpson vs. The Deficit. Again.

This is all window dressing. The GOP caved to the Right and got their way in the Senate, blocking a commission that would have had real bite. This is non-binding and will gradually fade away…

http://www.political-buzz.com/

Thanks, Karen. I appreciate your perspective, even when it starts with something you didn’t remember!

The Constant Weader at http://www.RealityChex.com

Agree that Simpson had a lot of snappy comments, but it is also inevitable that this commission is going to focus on those eeevvviiiilll programs such as Medicare, Medicaid and Social Security that do not actually have the problems claimed.

The defense budget with its wasteful spending?? Heavens no. Hope this is another report that sits on a shelf.

ps: I appreciate that Simpson went after the defense budget before, but that was then. The targets I mentioned above have even more Repub support now, justified or not.

Not sure that’s true. The defense budget was one of the basic pillars of the Reagan agenda; it was pretty bold for people of his own party to go after it.

Especially (note that first link from Jan. 1985) when Reagan was coming off one of the biggest re-election victories in American history.

KT:
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The commission’s job will be to…propose ways to hold down the surging costs of government programs such as Medicare, Medicaid and Social Security. The president will also ask the panel to look at the U.S. tax code and has not ruled out tax increases for the middle class…

This is insane.
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So the commission’s job will be to enforce center-right dogma on the country?
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No “holding down” of the DOD’s ever-”surging” three-quarter of a trillion dollar budget?
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No return to the marginal tax rates suffered by top earners during Reagan’s first term?
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No lower price scheduling for Medicare, doing away with expensive privatized Medicare (“Medicare Advantage”), or an end to the rebate system for Medicaid that keeps price floor for the whole health care market high as a kite? No drug importation for Part D? No real price controls?
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It’s just the same, tired old program of crazy entitlement cuts and middle-class tax increases they’ve been salivating about for decades?
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These people are complete ideologues, there’s apparently just no reasoning with them.
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Either that, or maybe your “Good luck with that, Senator” means what I think it does, i.e. that they’re not serious about the long-term deficit at all.
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Is that it, KT? Is this just another stunt, or do they really believe in their crazy, anti-middle-class deficit dogma?

Thanks so much for responding to commentary, KT.

” .. Good luck with that, Senator ..”

If we had no “luck” to blame, we wold get down in the trenches to find out the info we need and how to get them talking and cooperating – figuratively, which senator must be wired up or squeezed; who gets elongated in the rack; and who gets waterboarded – all legal options.

Alan Simpson’s quote, the last excerpt, makes me just want to beam with JOY???
If we know more than we do now, then what?? I will answer that…nothing changes.

For research about an existing problem to be considered worthwhile, the information garnered on the subject MUST be utilized.

The Party of No and their spin machine will thwart anything good proposed by Obama even if it causes the American public to endure more difficulty than necessary.
It appears the motto of the Republican party is “Make sure Obama fails no matter what happens to the American populace in the process.”

Whatever happens, I will be watching Simpson and his work with baited breath already knowing how it will end.

LM

http://theblindspotsofgod.wordpress.com/2010/02/15/stalking-criminality-the-law-and-women/

I’ve always liked Simpson.
Back when I first started remembering stuff, Wyoming had Simpson and Wallop as Senators. Wallop was a nasty proto-teabagger and Simpson was always the sane Senator from Wyoming.
Plus any guy who lost his WHIP position to KKK Republican Trent Lott because he was insufficiently hateful towards Americans is alright by me.

I feel compelled to go back to Slate’s Fred Kaplan:
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Deduct $170 billion (mostly soldier pay)—the hands-off portion—from the $552 billion amount (CBO estimate of the total military budget for FY10, not including emergency supplementals), and that leaves $382 billion. This $382 billion has nothing directly to do with the wars we’re fighting right now. That doesn’t mean it’s unnecessary or unjustified; maybe some of it is, maybe some of it isn’t. But it’s not the stuff of life and death, like the other parts of the budget—Social Security, Medicare, and Medicaid—that Obama wants to exclude from the freeze. It should be subject to the same discipline—the same line-by-line, page-by-page analysis—as the rest of the budget.
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He notes: Most of this $382 billion consists of weapons systems—combatant ships, fighter jets, submarines, heavy armored vehicles—that the individual branches of the military have been cranking out for decades.
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(link) (h/t Joe Klein)

Obama’s recent budget (2011-2020) projects total federal spending of $45.8 trillion of which nearly $20 trillion will be on 3 programs Social Security, Medicare and Medicaid.
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Medicare will run out of money in 2017, 2 years earlier than previously expected. Baby boomers will be retiring in earnest over the next decade this estimate will prove too optimistic

Calculations have been done that tax rates cannot go high enough to continue to pay out as the current programs are structures. They are currently nothing more than vehicles to transfer wealth from workers to retirees..

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But rather than address the problems of these programs it will be suggested to gut that evil defense department. You know the one that employs people that pays income taxes, social security taxes and medicare/medicaid taxes to continue the Ponzi schemes that would make Madoff blush.

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The levels of entitlement spending and debt levels (and accompanying interest payments) has surpassed what the knee jerk “tax the rich and cut defense” reactions can ever hope to fund.

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Add to this the state pension deficit levels where other hard decisions will need to be made is expected to create a dash for cash from state governments.
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No hard decisions will be made. This Budget Commission will be nothing more than a condom to provide politicians protection for the coming taxpayer screwing.

Thanks SZ for explaining what I only had time to write a sentence on.

Exactly!

It’s just the same, tired old program of crazy entitlement cuts and middle-class tax increases they’ve been salivating about for decades?

It’s called the “conservative” agenda. Starting to see where all “conservative” and “Third-way” roads lead?

freeinpa:
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If you read the Social Security trustees’ report, you’ll see that the main problem is Medicare, not Social Security. An older population isn’t really something the US economy can’t handle. SS’s money runs into the red for a brief period, sure, but it’s set up to borrow what it needs for the handful of years until the spike in payouts resumes its normal level course. We don’t tax people so that SS can have the biggest pile of cash just sitting around to cope with these unusual spikes. That’s because Social Security is really, really efficient, and only brings in what it needs in normal times. It’s Medicare that’s running off of the rails, and will break the bank if it’s not put in order.
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So what’s the problem with Medicare? It’s too expensive, because the prices of the health care it pays for are housing bubble-high.
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If an average CT imaging scan cost an $319, like it does in Germany, instead of $1000 to $1800, like it does here, Medicare’s problems would be solved.
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Medicare isn’t a Ponzi scheme, it’s a housing bubble.
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If the government would stop allowing Medicare and Medicaid (and all the private insurance companies too, by the way) to be ripped off and charged crazy, top dollar for everything under the sun, then Medicare spending would be less than the DOD’s budget, instead of a quarter-of-a-trillion dollars more.
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The bottom line is that we, the American people, need to stop the government from allowing these ripoffs to go on. That means the government taking the biggest spending programs –entitlements and DOD– and setting the prices at levels we can afford (that first world countries pay), not whatever defense contractors and drug companies can bribe Congress into letting them charge.

shepherdwong:
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Oh Lord…I was hoping to save these people’s eyesight from more strain…

I love how the folks here are already labeling this commission a failure and attributing all the blame to Simpson. As proposed there will be 6 Demos, 6 Repubs and 6 Named by Admins with Simpson, an R and Bowles a D as co-chairs.

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Given the rhetoric here no one is interested in a bipartisan solution of kind – you just want what you want! How grown up and Patriotic!

sz:

“S’s money runs into the red for a brief period, sure, but it’s set up to borrow what it needs for the handful of years until the spike in payouts resumes its normal level course. We don’t tax people so that SS can have the biggest pile of cash just sitting around to cope with these unusual spikes”

Given the history of revision to the solvency of SS, I would not place a lot of weight that the red is a brief period. We will have a spike of workers leaving the workforce and less than 2 workers for every one collecting SS. Since we already are in a huge budget deficit, it is reasonable to say SS, Medicare and Medicaid are already bankrupt.

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We will never be able to even approach a reasonable solution without addressing the entitlement side as well as the cost side. To believe otherwise, is foolish.

I believe it is also foolish to think that there will be no impact of the suggestions to cure the ailments of Medicaid and Medicare. There is always big cheers here for stopping the evil profiteers in health care, but at 16% of our GDP HC contributes more than just cost. The high costs pay for salaries (and taxes) of Dr. Nurses, Researchers and others. To keep attracting the best into the field means high profits. To believe that people will continue to enter these fields because they think it will be swell and they love mankind is naive.

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The economic blowback that we will experience if we only address cost as the ultimate answer will slide the entire country into a state whereby mediocrity will be the high point.

freeinpa:

The economic blowback that we will experience if we only address cost as the ultimate answer will slide the entire country into a state whereby mediocrity will be the high point.

But…that’s not what other first-world countries have experienced.
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The whole “mediocrity rules” notion sounds like it’s straight from an Ayn Rand novel.
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Why should Germans be able to do this, but not Americans? Are you honestly of the opinion that Germans have mediocre health care? The Germans would let other Germans somehow slide into poor health and early death because they have a ministry in their government that tells Merck (a German pharmaceutical firm) what they can charge for heart pills? These are the Germans we’re talking about!
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Do you seriously think that German (or Swiss, or Swedish or any European, for that matter) health care is worse than ours? Do you really believe that German surgeons and Swiss physicians and Swedish gynecologists are mediocre, while ours are superior?
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You can’t believe that, I’m sure of it. That would be completely ridiculous.

There is always big cheers here for stopping the evil profiteers in health care, but at 16% of our GDP HC contributes more than just cost. The high costs pay for salaries (and taxes) of Dr. Nurses, Researchers and others. To keep attracting the best into the field means high profits. To believe that people will continue to enter these fields because they think it will be swell and they love mankind is naive.

Whatever you’ve heard about liberals, I’m of the kind that believes highly in entrepreneurship and individual initiative, so I’m not telling you that people will be doctors and specialists out of pure, neighborly love, of course not.
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But that isn’t really what this is about.
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We’re in an inflation bubble that’s gone on and on for decades, just like the housing bubble went on for eight or so years.
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What you’re saying is that, if the price of health care comes down, the quality will come down. But when we’re in an inflationary market bubble, that’s like saying that we have to keep the price of houses at fall 2007 heights, otherwise builders will start constructing fall-apart housing. You know that’s just not true, freeinpa.
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Seriously, try to separate these sorts of fundamental beliefs you have (“expensive things mean high quality”, “price controls always create the wrong incentives”) from what you can see before your eyes is the case, freeinpa.
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We’re never going to agree on some things, you and I, but do you think that German conservatives and liberals agree on much? At least we might be able to get to the point where they are –the point where German conservatives and liberals can argue to their hearts content about the proper tax rate on businesses, while their working health care system gives them the best quality care for the best price of both parties’ hard-earned money.
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Or do you really, honestly believe that the Germans have got it all wrong, and are suffering in their desperation to enjoy a health care system just like ours, freeinpa?

Sayeth Simpson: “How did we get to a point in America where you get to a certain age in life, regardless of net worth or income, and you’re ‘entitled’? The word itself is killing us. Our job is to move this issue forward.”

Well, it’s certainly a snappy quote, Karen. But isn’t it also zany and way outside the mainstream? You could say this, after all, about any pension fund anywhere in the world. Does Simpson not believe in pensions? Does he also not realize that Social Security, like any pension, is simply deferred compensation for a lifetime of work in the service of others?

What would former Senator Simpson want us to do?
Few companies offer pensions and 401Ks are being weakened. Does he want us to invest in a volatile, unregulated Wall Street scheme? I collect Social Security. I don’t consider it an entitlement. I worked long and hard and paid social security taxes the whole time. I may take out more than I paid, but if the SS fund had been handled better there would have been less of a problem. As it is, it is not going broke as those who want to privatize it claim.
I have always been amused by Simpson and even been pleased by him at times. I hope this commission is more successful than the Iraq Study Group he served on.

SZ:

“Do you really believe that German surgeons and Swiss physicians and Swedish gynecologists are mediocre, while ours are superior?”

As a general rule YES! We hear numerous cases where people come to the US for treatment. Do you know anyone here in the US who has gone to Germany to seek treatment instead? Mexico maybe and receive treatment in the back of a Cantina.

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“What you’re saying is that, if the price of health care comes down, the quality will come down. But when we’re in an inflationary market bubble, that’s like saying that we have to keep the price of houses at fall 2007″

The answer again is YES. As bubbles correct in any industry, the blood letting of jobs is enormous. How many folks are still underemployed from the tech-wreck? Many companies disappeared. In fact the NASDAQ still hasn’t recovered. Pain was widespread.

The majority of health care costs occurs in the last few years of life. We have a population that will be like a pig in a python in the 60 years+ age category.

Let’s say we are spending X for Y (old people) + Z (all others).

You propose we can now Spend X-P for 1.5Y + 1.15Z with no appreciable affect on either quality or service? We are going to have a multiple of age 60+ than we have now receiving extensive health care that they can’t be refused. Add to them the balance with all of younger folks plus everyone without current coverage. These people without current coverage and those refused insurance will now be more frequent users (read:higher costs). All of this can be now paid for by X minus price controls or some other factor of P. Meaning payment for services drugs and equipment are cut.Which would indicate that salaries across the HC sector would be cut or money for capital expenditures would be cut So drug development, equipment inventions slow. As these slow they talent will choose careers where the money is being allocated. A reasonable person would figure this to mean lower quality of services or less services.

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It may seem like my view is that of an Ayn Rand novel but the belief that less money, more coverage more people covered forever without the loss of quality or service is more like Aesop’s Fables.

Free: Do you have some statistics to support the canard that people from other countries are flocking here for health care? You hear but do you have proof? I keep saying, if this was true of the Canadians then there would be clinics all along the border. Not so.

@apr: I’m with you. I’m also not concerned that you or anyone might take out more than you paid in. That can happen with any pension fund. Indeed, it’s supposed to happen. The pension manager is supposed to generate returns that take care of that problem. The government failed to do that, but we shouldn’t be penalized for it, rather the government should fix its mistakes.

apr2563

“Most of those patients in search of the best care, including 38% from Latin America, 35% from the Middle East, 16% from Europe and 7% from Canada, are heading to the United States. Additionally, it’s estimated that 32% of all medical travelers simply want better care than is available in their home countries, mostly those in the developing world, and 15% want quicker access to medically necessary procedures. That’s compared to only 9% of medical travelers seeking medically necessary procedures at lower prices and 4% seeking low-cost discretionary procedures.An estimated 40% of all medical travelers are looking for the world’s most advanced technologies, worrying little about the proximity of the destination or cost, according to consulting firm McKinsey & Co. It narrowly defined medical travelers as only those whose primary and explicit purpose in traveling was to obtain in-patient medical treatment in a foreign country, putting the total number of travelers at 60,000 to 85,000 per yea” (Forbes 5/25/08)

Of course is it a well known fact that McKinsey & Co. is a right wing terror group so it can’t be believed. Suprisingly Daily Kos, MSNBC and Huff Post are silent on the subject.

“I’m also not concerned that you or anyone might take out more than you paid in. That can happen with any pension fund.”
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That’s what is happening to 32 states pension funds who promised ridiculous payouts on the back of taxpayers. SS was never meant to be a pension fund it was designed as a safety net.

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When a pension fund manager mismanages or under performs he will be fired. Are you suggesting we fire the government?

If you add up all the “entitlements” and pensions from the government that are now in deficit, the left would have to tax all of the US, Canada and half of Europe to bring these to full funding. There are 2 true options: tax people into oblivion or cut the benefits. The question is do we want to hold the generation responsible for the problem or continue on our merry way and saddle the next several generations with it.

freeinpa:
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Come on.
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Let’s assume just for the sake of argument that these figures (which I haven’t looked up, and are from McKinsey, and not a health research organization) are accurate. Let’s also assume that 100% of these “medical travelers” aren’t looking for cosmetic surgery, but really need non-elective treatment.
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Take away the Middle-Easterners, the Latin Americans, whoever else besides Europeans, because we’re not talking about third-world countries having comparable health care to ours, we’re talking about Germans, remember?
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That’s 16% of around 70,000 people…that’s 11,200 European people who come to the US looking for some kind of treatment or special clinic available here, instead of in their own country.
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Let’s assume for the sake of argument that all of these people are Western European, and not Poles, Croats, Serbs, Slovaks or Romanians, too. Let’s just say they’re all from the rich parts of Europe, not Albania.
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OK, 11,200 people from the richest parts of Europe –presumably a percentage of Germans in there somewhere– that come to the US for its fine, yet insanely expensive medical care.
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I don’t know about you, freeinpa, but I need some sort of context with that number to make sense of whether or not it confirms your idea that our health care system is superior, while Europe’s is mediocre.
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Hmm…what could that be?
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…I know! What are the stats for European tourism to the United States? Let’s look at the medical tourists in the context of tourists, period, make sense? Let’s start with New York City (where I live), a fabulous tourist destination.
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Here are the stats for that (link to NYC tourism statistics):

Tourism in New York City is a large industry.
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According to NYC & Company (the official destination marketing organization for the city of New York), the top producing countries for international visitors to New York City in 2005 were the United Kingdom (1,169,000), Canada (815,000), Germany (401,000), Japan (299,000), Italy (292,000), France (268,000), Ireland (253,000), Australia (235,000), Spain (205,000), Greece (148,000), and the Netherlands (147,000).[9]

OK, are you getting the picture now, freeinpa?
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Using the most generous interpretations of your McKinsey stats, we’re talking about 11,200 Europeans coming for medical reasons vs 401,000 Germans alone coming to see the Statue of Liberty in one year –four years after 9/11, it should be noted.
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11,000 from all of Europe vs 400,000 from just Germany.
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Are you still willing to make the case that all those 11,200 of McKinsey’s medical tourists indubitably prove the superiority of the exorbitantly expensive US health care system, and the mediocrity of Germany’s?
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Are you still going to say “YES” after staring these facts in the face for a few minutes? Remember what I said about “fundamental beliefs” getting in the way of what’s in front of your own eyes, freeinpa?

SZ:

“Are you still going to say “YES” after staring these facts in the face for a few minutes? Remember what I said about “fundamental beliefs” getting in the way of what’s in front of your own eyes, freeinpa”

What’s in front of my eyes? What FACT correlates tourism and medical care. Your disbelief that people actually come to this country to pay for what you classify as overpriced sub-par health care? Why eliminate Latin America and the MIddle East? They may not have first class health care but a suffcient number has chosen to come to the US and not your provider of choice Germany. Exactly how does the number of tourist to NYC relate to those seeking HC. At best (if I believe your numbers) is a specious argument at best. The cost to 11,000 for heart surgery, hip replacement or other elective surgery (I wonder why Bill Clinton didn’t chose Germany for his elective heart procedure). is a tad higher than a boat ride to the Statute of Liberty a Broadway show and dinner at Le CIrque. If as you state the cost are lower and care is equivalent why would a single person from another country come here for medical care? Or are you saying don’t?

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Maybe you might want to step back and try to figure out what you are seeing and why you are seeing it that way. It sees closer to paranoia than analysis of reality.

stuart: Thanks for breaking down the stats free provided. I had pad and pen in hand to break down what appeared at first glance to disprove free’s proposition that people were flocking to the US for medical care. You did it much better than I could.
Free: Please look carefully at what you shared. It proves the opposite of what you contend.

freeinpa:

What’s in front of my eyes? What FACT correlates tourism and medical care.

OK, I’m making an argument here. The argument is that 11,200 “medical travelers” doesn’t suggest at all that people from first-world countries with systems that produce as good or better outcomes than ours at half the price don’t flood this country en masse every year.
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I’m looking to see what a flood of people would look like in terms of numbers, and so I bring up the real-life tsunami of tourists who come to my city every year to show you that the 11,200 number is peanuts.
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Of course these numbers aren’t correlated or dependent in the statistical sense, I’m just showing you that there’s not a lot of beef to McKinsey’s numbers, unless you wanted to suggest that Uruguay’s or Syria’s health care systems might not be as fine as ours.

Your disbelief that people actually come to this country to pay for what you classify as overpriced sub-par health care?

I know it’s tough sometimes when you’re in a heated debate with someone not to misstate their arguments, but let’s try a little harder, OK?
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I never said it was sub-par overall, I just said it’s overpriced, compared to what we’re getting vs other rich countries.

Why eliminate Latin America and the MIddle East? They may not have first class health care but a suffcient number has chosen to come to the US and not your provider of choice Germany.

Why eliminate these third-world places with huge poverty rates and lack of advanced technologies? Because their systems (and their governments, and their militaries) aren’t worth examining to see whether we can emulate their successes. If you want to win, win, win an argument over who has the best health care, then compare us to Honduras. That’s like the Yankees playing a little league team. Sure, the Yankees will win, but it won’t prove anything. Let’s let the Phillies (Germany) play the Yankees (us), and then we’ll know something significant about both teams. If the Phillies are winning games against the Yankees at a world-series level, but they’re spending half the money on their players, then something’s wrong with the Yankees, no matter how great they are.

I wonder why Bill Clinton didn’t chose Germany for his elective heart procedure

Where in the world some extremely rich guy has his surgery makes no difference to anything at all. Who cares? All that proves is how much that rich guy is willing to spend, not that a system works for middle-class people.

If as you state the cost are lower and care is equivalent why would a single person from another country come here for medical care? Or are you saying don’t?

Why would a single person come here? I don’t know, maybe because their brother is a doctor over here? In the case of Canadians, their system is so concerned about not making them wait that their government actually pays for treatment in the US if they don’t feel like waiting. Unfortunately for the designers of that program, the Canadian public doesn’t seem to have a problem:

* Canadians offered free care in the US paid by the Canadian government have sometimes declined it. In 1990 the British Columbia Medical Association ran radio ads asking, “What’s the longest you’d wait in line at a bank before getting really annoyed? Five minutes? Ten minutes? What if you needed a heart operation?”
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Following this, the government responded, as summarized by Robin Hutchinson, senior medical consultant for the health ministry’s heart program. Despite the medically questionable nature of heart bypass for milder cases of chest pain and follow-up studies showing heart bypass recipients were only 25-40% more likely to be relieved of chest pain than people who stay on heart medicine, the “public outcry” following the ads led the government to take action:
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“‘We did a deal with the University of Washington at Seattle‘ said Hutchinton..to take 50 bypass cases at $18,000 per head, almost $3,000 higher than the cost in Vancouver, with all the money [paid by] the province..In theory, the Seattle operations promised to take the heat off the Ministry of Health until a fourth heart surgery unit opened in the Vancouver suburb of New Westminster. If the first batch of Seattle bypasses went smoothly..then the government planned to buy three of four more 50-head blocks.
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But four weeks after announcing the plan, health administrators had to admit they were stumped. ‘As of now..we’ve have nine people sign up. The opposition party, the press, everybody’s making a big stink about our waiting lists. And we’ve got [only] nine people signed up! The surgeons ask their patients and they say, “I’d rather wait,” We thought we could get maybe two hundred and fifty done down in Seattle..but if nobody wants to go to Seattle, we’re stuck,’”.[71]

Again, I’ve got to say to you: come on, freeinpa.
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Why would a single person come here? Who cares?
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If there was a massive tide of medical tourism from first-world countries, if those countries had surveys showing that the populations were as unhappy with their health care systems as we are with ours, and if those countries had worse records of health care results than us, then that would mean something, but none of those things are the case.
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I don’t think that I sound paranoid, freeinpa, I just think that the evidence is overwhelmingly on the side of the argument that the government has allowed consumers to get ripped off by a system that’s twice as expensive as Germany’s (and every other rich country’s) for no good reason.