Sunday, April 10, 2011

Analysis from Another Planet

David Brooks Brings You Analysis from Another Planet: Praises Representative Ryan


By Dean Baker

Center for Economixc and Poicy Research

April 8, 2011


According to David Brooks, in the days following the

release of Representative Ryan's plan to essentially

end Medicare and Medicaid to help finance more tax

breaks to the wealthy:


"the Democrats are on defense because they are

unwilling to ask voters to confront the implications of

their choices."


I can't claim to have done a comprehensive survey, but

all the Democrats I know think that they were handed

the political gift of lifetime, as Representative Ryan

has explicitly proposed doing exactly what Democrats

have accused Republicans of wanting to do for decades:

eliminate health care programs that are essential for

middle class workers in order to give more money to

their wealthy contributors.


Things may be different on Mr. Brooks' planet, but here

in Washington there is no shortage of politicians

willing to denounce a plan that would require most

seniors to spend most of their income on health care,

if they want an insurance package equivalent to the one

provided by Medicare. The more obvious shortage is of

Republicans who are openly willing to embrace the Ryan

plan and say, "yes, we are the party that wants to

eliminate Medicare and give more tax breaks to the

richest people in the country."


Brooks again ignores the most obvious point that health

care is not a sidebar in this story, it is the story.

If the United States paid the same amount per person

for its health care as do people in other wealthy

countries, then we would be looking at huge budget

surpluses not deficits.


He also tries to pass off to NYT readers nonsense from

his Tea Party friends:


"The president's health reform plan relies on a

centralized board of technocrats to restrict choices.

The Ryan plan relies on a premium support model that

would allow individuals to exercise greater control

over what sorts of procedures they would not be covered for."


Can we get out the extra large ridicule box for this

one? There is nothing, as in zero, in President Obama's

health care plan that prevents any individual from

getting any health care procedure that he or she wants

to pay for. The "centralized board of technocrats" he

mentions would determine the procedures that Medicare

would pay for, not the procedures that individuals could receive.


Obviously this will be a very serious restriction for

people who cannot pay for expensive procedures on their

own, but Ryan's plan does not change this situation one

iota. It gives people a choice of insurance companies,

each of which will rely on a board of technocrats to restrict choices.


Using the Tea Party terminology, if President Obama's

plan is viewed as creating death panels, then Mr.

Ryan's plan gives seniors a choice of death panels and,

according to the Congressional Budget Office, we pay

trillions more for this choice.




Some folks have asked me about the generational equity

concerns raised by Brooks who tells readers that:


"two 56-years-olds with average earnings will pay about

$140,000 in dedicated Medicare taxes over their

lifetimes. They will receive about $430,000 in

benefits. This is an immoral imposition on future generations."


There are two important points here. First, most of

that $430,000 is over-payments to drug companies,

hospitals, doctors and other health care providers. If

these two 56-years-olds were buying their health care

in Canada, Germany, or any other country with

comparable health care outcomes, they would pay less

than half as much for their care. Should my older

brother feel that he has done me an injustice because

the government gets overcharged for his health care?

Maybe on Planet Brooks, but that's not an easy one to

see here on Earth.


The other point that Brooks seems to have missed is

that people are getting richer through time. The

lifetime earnings for two average 26-year-olds will be

more than $1.3 million greater on average than the

average lifetime earnings for today's 56-year-olds. If

the 26-year-old gets to pocket this much more cash,

simply by virtue of being born later, is there any

reason for the 56-year-old to feel they have committed

an injustice because they got a better deal on their Medicare?


Now, there is a serious issue of inequality that must

be considered. As a result of the fact that a larger

share of income is being distributed to those at the

top, most 26-year-olds may see little of this $1.3

million gain in earnings. But this is an issue of

intra-generational inequality, not inter-generational

inequality. On this dimension, Representative Ryan's

plan is a huge leap in the wrong direction.




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