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Tuesday, October 29, 2013

Moral Equivalence? Hunger.

Charles Blow (October 26: A19) reports that one in four American children live in poverty.
Reporting from North Korea, Choe Sang-Hun (October 26: A4  )tells us that "more than one quarter of North Korean children under age 5 live with chronic malnourishment."
This is certainly not a time to cut Food Stamp funding.

Sent to New York Times

Social Security fixes

I am a progressive but I do not take a hard line about making changes in Social Security. I just object strongly to the changes that the President has proposed (Obama, allies at odds on budget. Boston Globe, October 28, 2013: A1, A6).

Although Social Security does not contribute to the deficit, it is not yet on a firm financial basis.There are several ways to improve its finances but the one proposed: adopting the chained-CPI is the one that will harm the poorest recipients most. Chained-CPI does not reflect the reality of price changes that affect seniors. It severely underestimates them.
A better change, on the input side, would be to remove or raise the cap on Social Security earnings.
Paying out, we could change the tax treatment of Social Security earnings. Rich Americans only pay income tax on 85% of their Social Security income. One hundred percent of Social Security income should be included in gross income. The impact on low income seniors would be negligible; on rich Americans it would be a modest increase in taxes.

Paying out, we can also look at the payout rate. Despite being regressive at the paying in stage, Social Security is quite progressive when paying out.  Right now the Social Security formula for computing one's pension depends on Average Lifetime Earnings (ALE). Each year's earnings are converted into constant dollars and then a monthly average is calculated. Based on this, Social Security pays you:
- 90 percent of the first $767 of monthly ALE
- 32 percent of monthly ALE between $768 and $4,624,
- 15 percent of monthly  ALE above $4,625 to the cap of $9,475.
Changing the breakpoints, increasing the number of breakpoints (say new breakpoints at $3,000, at $6,000, and at $8000), or reducing the percentage payout at the highest level would maintain payouts for the poorest in our society, but reduce expenditures to those who can most afford it.
Both of these would affect higher income recipients while leaving the poorest unscathed.

Sent to Boston Globe

Monday, October 28, 2013

Health Care [New Yorker]

I disagree strongly with Mr. Horner's assertion that society has no interest in protecting people from their own irresponsible behavior (Letters, October 21, 2013)..

I believe that the best analogy to requiring universal health insurance is hat "friends do not let friends drive drunk."
After all, the exemplar cited in Dr. Gawande's article was not the only one to suffer the results of his neglect.
He lost his business: perhaps he had employees who lost their jobs; his state an local government lost the tax revenue they relied on.
He lost his home: the state and locality had to pick up the costs he incurred in the homeless center.
He may have been unable to pay all his medical bills: these costs are thrust o Mr. Horner and me through the increased insurance premiums we paid in order to cover the costs of healthcare for the uninsured.

It seems to me that government does have a compelling interest in this case.
Of course, like Senator Cruz, I enjoyed single payer system in Canada, so I may be biased.

Sent to New Yorker

Monday, October 21, 2013

Representatives Upton and Walden are correct in one of their complaints about the Obama administration: the threat of retroactive regulation by the FCC (How Obama Puts the Brakes on Business. Wall Street Journal, October 17, 2013: A15).
Retroactive legislation or regulation is odious. The great uncertainty it generates makes it impossible for anyone to make informed decisions about their actions. The FCC should withdraw that aspect of their rules.
As for the problems induced by Obamacare in terms of reducing employment to get under the 50 person limit, this shows the stupidity of not enacting a completely changed system that disconnected health insurance from employment. Alas, politics got in the way of sensible reform.

Sent to Wall Street Journal

Wednesday, October 9, 2013

Demonizing Opponents

I agree with Mr Jacoby that the demonizing of opponents has contributed to the gridlock in Congress. Unfortunately from day one, Republicans have worked relentlessly to make President Obama either a one term President or to overturn every legislative program he proposes.
There has been no hint of accommodation on the Republican side and, in the first term, the President was attacked by liberals for compromising too much (e.g., no single payer option in Obamacare).
I do take exception to Mr. Jacoby's context free comment about then-Senator Obama's vote against raising the debt limit in 2006.
At that time, the US was in the wake of President Bush's tax cuts. GDP was then at an all time high of about $12 trillion and was rising at an annual rate of 6%.  Now 7 years later GDP, after declining during the financial crisis, has risen to $16 trillion; but the rate of increase has been a sluggish 3%.
In 2006, the good times, it was a good idea to close the gap by increasing revenue rather than raising the debt limit. Today, either increasing revenue or cutting expenditures would be a very bad idea indeed.

Sent to Boston Globe

Sunday, October 6, 2013

Medicare: How about help across state lines

It is indeed "outrageous that millions of the poorest people in the country will be denied health insurance because of decisions made mostly by Republican governors and legislatures." (A Population Betrayed. New York Times, October 4, 2013: A30).

However there may be something that we can do about it. Perhaps Massachusetts which will face the fewest demands under Obamacare could rewrite its regulations for Medicaid eligibility so that those denied insurance through Medicaid in say Tennessee would be eligible for Medicaid in Massachusetts.

This would be relatively simple to manage at a distance, all that Massachusetts would be providing is insurance. Care would still be provided in Tennessee and providers would have to conform to the Tennessee standards.

This generosity would cost Massachusetts nothing as the Federal Government would be paying the additional Medicare costs (at least for the first three years, and by then Tennessee and the other non-expansion states might have seen the error of heir ways).

As an experiment in being good neighbors, this would be well worth doing.

Sent to New York Times

Friday, October 4, 2013

Yvonne Abraham (Laboring over a position, Boston Globe, October 3rd., 2013:B1) finds the arbitration award to police officers excessive. She derides arbitrators as being split the difference automatons. There is a better way: final offer arbitration.

This is the best procedure to use in public sector bargaining if the parties cannot come to agreement themselves.. In final offer arbitration, the city and the union would put forward heir best and final offers. The arbitrator would hen select from the two positions. This process forces both parties to come up with “reasonable offers.”

I would take strong exception to her acceptance of the norm that “workers all over the city are taking no pay increases, or worse.” This is not what we should expect; we should expect that workers share in the productivity increases that the county has enjoyed. This has not happened since the 1970's. Prior to 1970, employees shared the wealth. Pay increases averaged 4.2% per year. between 1948 and 1970. Since 1975, pay increase have averaged 0.3% per year in constant dollars..

We need to return to a society that values the contribution of all its members.

Sent to Boston Globe