Sugar and the Real Reason for Cruz’s Opposition
Ted Cruz is worried about sugar addiction. Or rather, that Obamacare is like sugar addiction. He uses the metaphor over and over. Why? His point is this: once Obamacare is passed, Americans will get used to the sugar of health care insurance exchanges and won’t want to give it up. So we must fight it with any means necessary, at any cost necessary. Now, because this is a fight that cannot be won later.
There is a measured and rational GOP opposition to Obamacare. And then there is the opposition that sees Obamacare as so historically momentous, as so disastrous, it is willing to let the government shut down, let over a million people work without pay, let almost a million more go without paychecks to stop it. (Full disclosure: my husband is on federal furlough. His federal employment, however, is only part of his employment. So right now our household income is reduced by about 1/6.)
The idea that the shutdown is caused by Democratic intransigence is simply preposterous. GOP representative Peter King put it best: “Defunding the law? If Tip O’Neill said in the 1980s we are going to shut the government down unless Reagan stopped Star Wars or repealed his tax cuts, we would have said, ‘It’s left-wing Bolshevism.’ So I don’t see it as a conservative policy as much as a guerrilla tactic.”
Really, the Cruzites shouldn’t deny the intransigence. They should own it! Given what appear to be the Cruzites’ beliefs about Obamacare, they should be intransigent. My personal favorite is from GOP representative Todd Rokita from Indiana, who called Obamacare “the most insidious law known to man.” In a world that has known genocide as national policy, in a world that has known the Nuremberg laws, in a country that has known laws permitting slavery, Rokita’s view is, shall we say, a strong statement.
The GOP opposition has been making two separate arguments about health care. The first argument is that the law violates our rights. The Cruzites believe government may not forcibly take earned money from some of its citizens to pay for the health care of other citizens. This argument is reasonable and persuasive enough, although I disagree with it. It is not most-insidious-law-known-to-man-shutting-down-government-stopping-the-paychecks-of-millions-threatening-a-shaky-economy-failure-to-respect-the-outcome-of-democratic-processes-with-which-one-disagrees persuasive, but there’s a case to be made there. However, I don’t think it holds much sway with the public.
Given the general public tolerance for public education, Social Security, Medicare, and the NIH – as well as many other federal programs which are currently shuttered – I do not think it is a large percentage of Americans who oppose Obamacare a matter of rock-hard principle. Let’s say it could be conclusively demonstrated that more people would be better off with Obamacare then without it. I suspect many people who are currently opposed to Obamacare – especially independents who don’t have an axe to grind with Obama – would be in favor of it.
A Quinnipiac poll released yesterday (10/1) suggests that 47% of Americans are opposed to Obamacare. Do they all think Obamacare violates their rights? Only 22% approve of the shutdown, 72% disapprove. At least some of the 47% who oppose the law do not seem to think it is a right that should be protected by drastic measures.
Some other interesting numbers here (a CBS news poll from 9/25). Approval of Obamacare is at 39% (in the Quinnipiac poll above, taken a week later, it’s at 45%). 79% of people think will either hurt them personally or have no effect, while 18% think it will benefit them. 67% think it will either hurt the economy or have a neutral effect, while only 26% think it will help the economy. Given such a hopeless view of the benefits of the law, what’s actually shocking is that so many people do approve of the law. There appear to be a not-insignificant number of people who believe that Obamacare will have a neutral-or-negative effect on their lives, and/or a neutral-or-negative effect on the economy who nonetheless support the law. Both sides seem to have their ideologues; however, on both sides, it seems that most people have pragmatic concerns. They will approve of the law if they think it will help themselves or others, or disapprove if they think it does not.
I can’t imagine very many people rallying behind Cruz if he said flat out, “Obamacare will make us better off, but we still shouldn’t pass it as a matter of principle!” Here’s the weird thing, though. That seems to be exactly what he’s saying — at least sometimes.
He does make an argument that we would be worse off. He says flat-out:
There is bipartisan agreement that Obamacare isn’t working. It’s killing jobs, causing more and more Americans to be driven into part-time employment, causing employers to drop health insurance and dramatically increasing health insurance premiums. Even the unions — President Obama’s most reliable allies — are jumping ship.
Yet then. Why the sugar? Why would such a law that is so harmful be so sweet?
Some, including President Obama, have pointed out that the sugar addiction analogy seems odd, on its face. They note correctly that an implication of Ted Cruz’s argument, an argument with which Rush Limbaugh and Sean Hannity appear to agree, cedes that Americans will like the law. As Obama says:
In fact, one of the major opponents when asked, why is it you potentially shut down the government at this point just to block Obamacare? He basically, fessed up. He said, well once, consumers get hooked on having health insurance, and subsidies, then they won`t want to give it up.
John Aravosis suggests the fear that Americans will like Obamacare of Cruz’s is what lies beneath the surface of his recent Seuss-reading antics:
When you cut through the presidential-hopeful-pandering side of Ted Cruz’ faux filibuster of Obamacare that’s currently taking place live on the US Senate floor, you come to the conclusion that the man thinks the greatest risk from Obamacare is that the public might actually like it.
But let’s be fair to Cruz. His belief that people will like the law is not some hidden implication of his argument that never occurred to him. Indeed, that is his point in using the sugar addiction analogy. It is not a hidden implication of his view, it is a flat-out admission that people will like it. People like sugar, but it’s bad for them. He is agreeing that people will like the law, but believes that they will be mistaken. But this actually makes no sense.
Why would the great and good American people like a law, and be sucking on it like sugar, if it were actually a harmful, job-killing law? If there is bipartisan agreement, even among unions (unions!) that the law is harmful?
One possible answer is that the American people are stupid and/or delusional. I am guessing that Cruz does not believe this, and definitely does not want to argue it.
The other possible reason that I can think of is that it prevents short-term benefits such that people will knowingly disregard their long-term interests in order to pursue them. This is likely what Cruz thinks about welfare. People get money from the government for nothing, and thus are disincentivized from working and aiming for their own (and the country’s) long-term benefit.
But this is not at all analogous with Obamacare. From what will it disincentivize people? Will people suddenly take up smoking, or decide obesity is the path for them? I’m guessing the number of people who would jump at the chance to smoke or be obese if only they had health insurance is vanishingly small. It won’t disincentivize them from working. Health insurance is a matter of prioritizing long-term interests over short-term gain.
It’s one thing if Cruz stuck with his job-killing argument against Obamacare. But the sugar-addicted argument is even stranger than Obama et al. suggest. If Americans will be sucking at Obamacare like sugar-addicted toddlers at a birthday party, and they are not delusional, they are not doing it because they mistakenly like it. They will be doing it because it actually makes them better off. So Cruz seems to believe (unlike most Americans!) that Obamacare will, in fact, make people better off.
Now, since he also believes that Obamacare violates his rights, there is nothing inconsistent in his opposition. It makes perfect sense to think that something is a violation of your rights and should not be done, even if more people would be better off.
But. I seriously seriously doubt that the American people would follow him on this one. The real reason for his fight seems not to be a fear of negative consequences, but to protect a right not to pay for others’ health care. And I don’t think most Americans are believe that such a right exists.
People like low taxes and high levels of government services. However, this is an unsustainable long term situation. Looking at California’s initiative process, where voters essentially vote for lower taxes and high services until there’s a budget crisis, it’s not inconceivable that people can be quite irrational about things.
FWIW, this is why the “Starve the Beast” strategy is doomed to failure. It gives voters the sugar (gov’t services) without the cavities (taxes).Report
And yet once (by initiative — Prop 25) the threshold for passing a budget was reduced to a simple majority and the Republican party was reduced to a rump minority, California is now running in the black and there was no budget crisis this year.Report
40 Years Later.Report
“Starve the Best” was never a strategy. It’s a rationalization for “supply-side” (i.e. massive and unfunded) tax cuts not having their predicted effect.Report
A good proportion of the people oppossed to Obamacare are opposed to it because they don’t think it goes far enough. I’d say somewhere between 12 to 15 percent want something further to the left of the ACA. Any poll about opposition to Obamacare that doesn’t mention this fact is really lazy.
The thing about Ted Cruz’s anaology to addiction is that it is accurate from his worldview. FDR once famously said that a “necssitious man is not a free man.” Liberals support see the welfare state as being supporting of human freedom because we, if I may be briefly presumptuous, believe that protecting people from the vagrancies of life and ensuring access to the necesities of life makes it easier for people to make risky decisions and actions. A person might more likely choose to become an artist if she knows that things like health care, housing, and food are easy to get.
The conservative response to FDR might be something like “a dependent man is not a free man.” Conservatives might see the welfare state as contrary to freedom because it makes people dependent on something, in this case the government, for the necessities of life. A dependent person can never be truly free because the provider gains tremendous control over people’s choices if they so desire. In this worldview, the addiction metaphor is apt because conservatives see the welfare state as something that is easy to get addicted to just like drugs and alcohol or sugar. People like drugs and alcohol, they provide pleasure and as a result many grow dependent on them. Conservatives realize that most people like welfare state measures and demand more because they are popular. Thats why they have to be stopped at once from the conservative worldview.
I disagree with Ted Cruz on the ACA but I actually think that coming from the part of the conservative worldview that opposes the welfare state, the addiction metaphor isn’t exactly inaccurate.Report
I basically agree with Lee.
The argument is that creating a government program which provides benefits creates an interest group dependent upon its continuance and expansion. This can be both the recipients of the program and the administrators or bureaucracy running the program.
Btw, I have no idea whether Cruz’s analogy or argument was correct or not. I am just agreeing with Lee.Report
Roger, while its true any program creates an interest group that doesn’t really address whether the program is a good idea or works. That something works so people like it, which is certainly part of Cruz’s fear, isn’t much of a criticism unless you are going for some kind of false consciousness thing. I’m sure Cruz would go there.Report
I agree with this but i’d add that a person who is dependent on their employer for health insurance is still dependent. Conservatives seem to be fine with this kind of dependence. There are some other examples like this so i think the issue is less about dependence but more about governmentReport
Thats one reason why I’m a liberal and not a conservative. Its impossible to build a society where nobody is dependent. This is especially true in modern post-industrial societies where most people will always work for somebody else rather than be self-employed.Report
“Conservatives realize that most people like welfare state measures and demand more because they are popular. Thats why they have to be stopped at once from the conservative worldview.”
I think the argument is that everybody likes things that other people pay for. Once you give someone something that others pay for, they will howl like banshees if you try to take it away. There is no fundamental dislike of this stuff. The reason conservatives warn against it is that eventually you run out of everyone else’s stuff.
I know you guys disagree. That is fine. But let’s be fair about what you disagree with.Report
That touches on Tim’s post about healthcare a few days ago, that we need to divorce health insurance from government/employers, as well as allow people to change insurers without penalty (as we do auto/home/life).
The dependence, be it to government or employers, for health insurance is a constructed thing, crafted into law. It shouldn’t be.Report
Its the “other peoples stuff” that clanks. I like SS and i pay SS taxes even though i’m not using SS yet. I pay plenty of taxes for national parks, OSHA. SCHIP, Medicare/Caid, etc etc. I’m voting to use my tax money for stuff. Now a libertarian might than say i should just band together with people who agree with me and do that stuff privately. I don’t think that would remotely work and we would than disagree about the function of gov. But what you are glossing over, or tacitly agreeing with, is the R notion of a large group of “takers” who are draining the country. R’s like Cruz are going for a “those people” are just bad and weak and are destroying my Good American Republican Voting kind of people. It’s much more of an us v them argument.Report
I agree with this but i’d add that a person who is dependent on their employer for health insurance is still dependent.
Exactly. Many of the things that conservatives complain about for government-mediated health insurance also applies to employer-provided group plans. For example, I get to continue to see my doctor of choice under coverage right up until she is dropped from the insurance company’s network, or my employer changes insurers and she is not part of the new insurance company’s plan. My family lived through the latter one. After 15 happy years with Kaiser Permanente, my employer dropped Kaiser from the list of options. The reason given was that it wasn’t cost-effective for this large national company to deal with insurers on a state-by-state basis, so choices would be limited to insurers with national programs. It was a painful change — dealing with Kaiser was a breeze compared to dealing with the new insurance company.Report
Now a libertarian might than say i should just band together with people who agree with me and do that stuff privately.
Or, as we like to call it, “government”. 🙂
I guess once enough of you band together, it’s not private anymore.Report
“Now a libertarian might than say i should just band together with people who agree with me and do that stuff privately.
Or, as we like to call it, “government”. 🙂
I guess once enough of you band together, it’s not private anymore.”
This is actually something I wonder about. If I buy an island, making it my own, and allow people to live on it in exchange for X% of their income… am I a government? Or a private enterprise? How do we really define the difference?Report
I don’t know. If you own an island and let people live on it, you’re more a landlord. If you are making and enforcing the rules, however, I’d say that’s more government-y. Whoever has the most effective use of force. Maybe you’d have to add something so that a family isn’t a government. So if either you alone or you as part of a body of people make and effectively enforce the rules in land you don’t own/rent, that’s a government. Political philosophy is so not my bag; I’m sure there are a gazillion definitions out there, but I don’t know them.Report
am I a government? Or a private enterprise? How do we really define the difference?
It’s government, for sure. It might fail to arise to the level of Government on some people’s views.
From my own very limited experience with the extant literature, there are primarily two divergent ways to think about this. One is the stationary bandit model (read Mancur Olson for this). The other is a social contract model (read, well, anyone in the Western canon for this). The stationary bandit model is based on the idea of a third party imposing a taxing structure on a community by physical force. The consent of the governed model is based on the idea of folks voluntarily transferring enforcement of some of their rights claims against others to a third party (moreorless).
In other words: yes, this would be a government.Report
Or maybe not, now that I re-read your comment. If the only thing exchanged is a percentage of income for access to live there, then it seems to me a commercial enterprise.Report
Ecch, now cometh the doctrines of Estates and Sovereignty. Unless you’re running Kazzystan, and there’s nowhere on earth except Antarctica which isn’t claimed by one state — sometimes several — your property rights arise from the sovereign, or synonymously, the State.
There are some tricksy corners with tribal reservations but ultimately, even they act as a sovereign entity, granting property rights.
Since you’re not a government, you can’t just make laws on your own. That said, if you oblige your tenants to abide by covenants and such, doesn’t matter whose mandate you use to enforce those contracts: your own lawyer will resort to the government and deal with siccing the justice system on the violators.Report
So what if you get folks to sign a contract that says:
A) They will pay 10% of their income to live there.
B) Should they fail to pay 10% of their income, the island owner may forcefully remove the individual.
C) The island owner reserves the right to make all rules related to living on the island but
Csub1) If 3/4 of the island’s tenants formally voice opposition to the rules, they will be eliminated.
D) All rules not eliminated are punishable by forceable removal from the island.
I mean, to me, that sounds like a government. But it is really just a bunch of individuals entering into private contracts.
I’ve considered a post wherein I paint a more detailed hypothetical that explores this. More or less, it shows how a government can more or less organically arise from a series of private transactions and, if so, how would libertarians respond to that? E.g., the private land owner sells land with a condition that stipulates the purchaser will pay X% of the assessed value of the land each year and that this condition is transferred to all subsequent transactions for the land. Is that a government imposing property taxes? Or a private contract?
I honestly don’t know.Report
Towards the end of every contract, there’s usually some bit about Governing Law:
This Agreement shall be governed, construed, and enforced in accordance with the laws of the State of [your state here], without regard to its conflict of laws rules.
Makes everyone involved go to the same court and quit playing games about venue.
A government has a contract with its citizens. It’s called a constitution.Report
So if that language appealed to the Island of Kazzyland, I would be declaring myself a government?
In that case, doesn’t even the most stringent form of libertarianism based on private contracts require some form of government?Report
Is Kazzyland a nation or not? Does it have a constitution or are you just Emperor Kazzy? In which case, you can dismiss the contract out of hand, the Emperor’s word is law. Pointless even having such a contract.
That was the problem with the Ottoman Empire, no plats or deeds. The pasha or bey could move you where he liked according to local custom — but he didn’t have to abide by it. When the Ottomans finally got around to reforming the land deed system, the whole thing became a huge mess. Nobody wanted to own land because then you’d be paying landowner taxes and having to serve in the military and a dozen other unpleasant consequences. It’s led to substantial problems with regard to Israel and the PA: nobody can say with any authority who owned what.
Kazzystan would need some sort of court system where such things could be sorted out, where even Emperor Kazzy would have to be subject to law, where contracts were binding upon all parties.Report
Kazzy,
Libertarians and classical liberals usually advocate restrained government. Anarchists advocate no government.
My quick answer is that the role of government is related to the function of force or coercion. In your example, if someone violated the rules, how do you enforce eviction? If you guys all just agree to collectively evict violators, then I think it is debatable whether there is any government “entity”, as opposed to a government role distributed among members.
Complex societies tend to have a specialized entity though which is given a monopoly on the use of coercion. This is a government. Classical liberals tend to be leery as its role is coercion, and we tend to find coercion is best as a last, rather than first, resort. Thus limited government, not no government.
I suggest you write the post though. Most non lefties bailed on this particular conservative bashing echo chamber a while ago.Report
@roger
Complex societies tend to have a specialized entity though which is given a monopoly on the use of coercion. This is a government.
This is a very narrow view of government. There are many other functions beyond holding a monopoly on coercion. Right now, NIH is mostly shut down. So if a contagious disease breaks out, tracking and responding will be hampered. There’s nothing of coercion here. If I want to consult with my County Extension Service about my soil quality, there’s nothing about coercion involved.Report
What i want to know about Kazzyland is, how much value does it have in Risk?Report
Why don’t you just hand out a Chick Tract or some comic book version of Road to Serfdom, dumbed down to maybe a third grade reading level, Roger? Governments are what their constitutions say they are — and they’re given life in their ability to enforce their writ upon their sovereign territories. Attenuating Force and Fraud are just about the most childish rationales for government, ever. Just government derives its power from the consent of the governed, not some Fisher-Price play supermarket with plastic coins and a little cash register which goes Ding.Report
Here’s the Road To Serfdom in cartoons, for what it’s worth.
http://stewartglass.net/readings/the_road_to_serfdom_in_cart.pdf
I’m just glad we don’t have secret police spying on us.Report
Well say what you want bout The Road to Serfdom but england and all the free world did devolve into a socialist hellscape because the C’s lost the election in the UK in 47.Report
Is there a Bunnies Theater version of The Road to Serfdom too?Report
Government maintains a right to use violence to enforce it’s will.
So if you own an island & let people live there, you are a corporation providing a service. If you carry a gun & require that everyone listen to you or you reserve the right to shoot them, you are a government.Report
Zic,
Of course there are other functions. Note my response was aimed at Kazzy’s hypothetical. Just about everyone agrees governments should handle public goods such as defense. As my comment stressed some of us disagree how much further it should be extended. Somewhere between law enforcement and universal cell phones for all.
Much of this stems from the operational methods of government. It isn’t usually “those interested in good X should sign up.” It is “we have determined that everyone needs a good X so we are going to require you to all take our version of it or we will throw you in the slammer.”
I am being silly and hyperbolic to make a point. Some rational adults with good moral intentions believe, rightly or wrongly, that lots of these goods (not all) are better delivered via voluntary mechanisms between constructively competing entities where practical. I know you disagree. I respect that. I do hope you understand my argument, even if you disagree with it.Report
@roger, you know why I disagree?
Because this afternoon, driving back with my car and it’s fried computer, I heard a piece on NPR about 4-H. This is a government-run/volunteer program for kids who grow up in rural areas. I’m a gold-pin member (or was, as a kid). This is a government-run program that provides assistance to volunteers who work with kids. Kids like me. I learned to sew, knit, crochet, and design fashion, my current career. I to raised cows and milked them, but honestly, I would have learned this no matter what, it was my family business, and I worked in it as a child laborer. I raised and sold cattle for meat. I had vegetable gardens and ran a farm stand, selling them for profit. I learned a lot of my life skills through 4-H, and the expertise provided to the plan by the extension service, part of the Dept. of Agriculture.
I also spend a great deal of time in a national forest, part of that very same department of agriculture.
And believe me, I know there’s abuse.
But so very many aspects of my life have been good because of government programs like 4-H.
In Maine, where I live, it’s 100 years of it this year. It’s peak season; the Fryeburg Fair, the crown jewel of Maine’s fairs until Common Ground, happens this weak. I have many, many friends participating; doing demonstrations, selling their products, performing on the stages, and competing in the show rings. Luckily, they’re still open, unlike my local National Forest office; that’s money distributed to the counties, and there’s a lot of local money and volunteerism in the fair.
There’s nothing wrong with someone getting a table scrap, like I got a table scrap through 4-H, that nurtured me. This is a good thing, and I believe it should be encouraged. And it’s in great part government that makes it happen; a public/private partnership that’s gone on for a hundred years.
So the narrow lens of coercion seems ludicrous to me. You’re taking something that’s been very, very good for me, and seeing a monster. Sometimes it is, but you don’t cut your arm off because you broke your finger most days. You fix your finger.Report
@roger So, I wasn’t being overly snarky earlier at all? What beyond “protect my stuff” do you think government should handle? If it’s just violence and nothing else, I’d say lets be consistent and leave that up to individuals and communities too. Otherwise, it seems like you’re cherry picking.Report
You’re leaving out the fundamental libertarian tautology:
If a program like 4-H is valuable, the government doesn’t have to provide it: the market will. We know this because we define “valuable” as the sort of thing the market provides.Report
@mike-schilling, that’s what it was, though. Farmers teaching stuff to kids with the aid of government-provided information and support.
A lot of it was corrupt, I’ll admit that in a minute. Just like the farm bill’s corrupt with industrial farming. It was all fertilizer and pesticides, a real tool to market bad shit to small farms. I sometimes wonder if that and industrial pollutants from the paper industry are responsible for my frayed nervous system.
‘Cause I have frequent vapors. Grab the smelling salts and put me in a dark room.Report
@roger
I can respect an ideology based on a highly restrained government.
I struggle with the anarchists. I can’t see the ideology as anything other than “Might makes right”.Report
Implicit in the “people like sugar” argument is actually that those kind of people will vote for things they like that are bad for them. However Cruz’s good kind of people voted him in to do the Really Actually Good Things like making sure some people don’t’ have health insurance and the health care that comes from having HI. He is all for doing what voters want when he agrees with it. If you are a voter who disagrees then you just like sugar from uncle sams teets. This isn’t really much different from the argument pretty much everybody makes about which voters to listen to except that Cruz ads the denigration of people he disagrees with.
I don’t think Cruz is saying much more than the classic 47%er argument R’s have been making for years. They believe there is a large class of people who will vote themselves benefits even if it fishes over the country. Those benefits from others peoples taxes, of course, don’t include Medicaid, SS or the zillion other gov programs that help large portions of R’s.Report
Agreed.Report
Actually, SS and Medicaid are perfect examples of the dependency which cannot be taken away. There is an inherent ratcheting effect of the welfare state. It grows and creates people dependent upon it.
Obviously retirement security and health care are good things. The argument is how much of these should be paid by others. Probably not zero or 100%. Lots of range between.Report
Since its obvious retirement security and health care are good, which they are, then the discussion is about how to obtain them for the most people. SS and MC are popular because they work. It seems like your are equating things working with dependence. In that way no program you disagree with can ever be judged good since if it works people are than dependence which is bad. Sort of circular sounding to me. Also if health care and retirement security are provided by SS and MC than that makes people less dependent.Report
You’ve sidestepped the issue of other people paying for it.Report
I don’t see that. We pay taxes that pays for gov programs. That is all of us, not just some of us. I get that you might make the taxes are theft kind of argument but the post was about Cruz. R’s don’t believe that. Cruz and many other R’s are going for a ” those moochers” argument which is different. They are fine with taxes for things they like, they just don’t like “them” getting benefits since they are the wrong sort of people, somehow have never ever paid taxes and are lazy good for nothings.Report
The only legitimate use of taxes is to keep other people from taking my stuff which I collected all on my own in Somalia.Report
You’ve sidestepped the issue of other people paying for it.
The fungibility — and sudden lack of it — of money never ceases to amaze me.
Wanna hear a funny story? When I deposit a wad of cash in my bank, and then remove it a year later? It’s not the same bills. Crazy, no?Report
which is why SS and Medicaid benefits are so incredibly generous.
wait, they’re not?Report
Lot of pointless snarks flying here, but let me stick with Greg’s serious reply.
I started by saying I have no knowledge of Cruz’s speech or motives. I am sure we can both agree he is a bad lizard.
My point, riffing off Lee, is that government programs do create dependency which makes them hard to repeal. I get that some of you see this as a feature, not a bug. Fine.
I just ask you to grant that an intelligent and good person could be opposed to creating too much dependency upon other people’s money. This does not imply taxation is theft. This does not imply that there are never Public Goods, nor that there is never need of safety nets or redistribution.
If anyone is interested I could list the arguments. If you are not interested, then it is probably better that I know that now rather than later.Report
Roger, “If anyone is interested I could list the arguments. If you are not interested, then it is probably better that I know that now rather than later.”
Sign me up. It’s a rain day here and the limits of twitter aren’t catching my interest. When are safety nets merited? How broad should they be? How do you defend redistribution on the State level? Given our current realities, how good of an investment is the Federal Gov?Report
Roger, as noted in my original response, I’m on the liberal side. I was merely trying to guess at why the sugar analogy might actually be appropriate for conservatives on an intellectual level.
Generally, most people have always been at least somewhat dependent on somebody else throughout human history for the necessities of life. It could be on family, clan, tribe, lord, priest, employer, banker, a host of other things or a combination. The real issue is what is the least coercive thing that you could be dependent on for these necessities. The answer seems to be a democratic government with a welfare state and mixed market economy. Whats required in return for services is much less than what clan or religion demanded.Report
Lee,
I know your political leanings and respect them. I agree that people are a cooperative species. We depend upon cooperation and we often cooperate to help others that depend upon us. I also concur that a mixed economy has a better track record than the alternatives.
The argument is one on how much collectivizing needs to be done. Collectivize too much and you run into problems with incentives. If everyone gets equal shares, why put any effort into production? If on the other hand we don’t have any safety nets, then people are at risk of major suffering in times of trouble.
If SS goes to far with centralized planning and redistribution, according to the beliefs of a conservative or libertarian, the risk to them is that once implemented it becomes impossible to reverse. Everyone becomes logically and rationally dependent upon it.Report
Rog- I think there is a disconnect here related to values. If a gov program provides security and does it well then it is 1) doing its job well, 2) providing a public good and 3) doing something people like. You are then saying that equals dependence, which seems purely like a value judgment which no program can ever escape. Of course any program can have poor incentives, so can any law or pretty much any kind of custom or thing that can be done. Of course if we do to much that can remove the incentive to do anything. There really isn’t any argument on those two things, the issue is more of a pragmatic one then philosophical at that point.
There is the impression, grossly mistaken i think, on the right that our social welfare system is super generous and easy on people. This leads R’s to want to humiliate poor people more and cut what are often actually pretty meager benefits.Report
Cascadian,
The most obvious problems with living off other people’s money are that it reduces the incentives to produce and reduces the incentive to use the shared resource efficiently.
I would leave the decisions on the size and scope of safety nets to individuals. This can be done via building choice and alternatives wherever possible;
If it can be handled by private markets let it.
If it can’t, then create competing alternatives where practical and allow people to choose where practical.
If you can’t create competing alternatives, allow voluntary opt outs with consequences where practical,
If you can’t create any of the above require supermajorities and sunset provisions.Report
Roger, “The most obvious problems with living off other people’s money are that it reduces the incentives to produce and reduces the incentive to use the shared resource efficiently.” True to an extent. The obvious answer which has been forwarded elsewhere, is that it also gives a certain amount of freedom to take greater risks with possible rewards. This is going to be more true in more affluent societies.
On the breadth of the net. I’m generally in favor of State laboratories but to be able to effectively experiment… give alternatives, some distance, perhaps via residency requirements, will be required.
“If it can be handled by private markets let it.
If it can’t, then create competing alternatives where practical and allow people to choose where practical.” I think there are places for markets and places where they should be excluded. Water and utilities come immediately to mind for the latter.
“If you can’t create competing alternatives, allow voluntary opt outs with consequences where practical,” I don’t think I can disagree with this too much. Though the consequences could be severe.Report
Greg,
I agree it is a matter of balance and degree.
Cascadian,
I found a lot of value in all your suggestions.Report
Does the sugar document differ in anyway from the old moral hazard argument? It seems like it is the same but using a simple metaphor/analogy instead of wonk language? I imagine most people just trail away when they hear a wonk talk about moral hazards. Plus it sounds pompous and Cruz must known that most people think he is pompous.
We covered a lot of this stuff in Jason K’s thread I think. The GOP has a suicide caucus according to Ryan Lizza. These are 80 or so Congress people plus some Senators whose districts and states are at severe odds with demographic trends with the rest of the United States. Their districts tend to be whiter, older, wealthier, and they can bring the government to a shutdown because of their views on Obamacare.
The Conservative movement has a strong authoritarian and legitimacy streak. Simply put: They are the only holders of legitimate power and authority and everything else is wrong. They will never accept a Democratic President or Congress as being the real will or voice of the people. 2012 just washes over them.
http://prospect.org/article/madness-will-never-end
Peter King is very conservative. As a former resident of Gary Ackerman’s district, he always struck me as fairly authoritarian. But his district is moderate enough that he could potentially lose to a Democratic candidate. Long Island used to be a bedrock of Suburban Republicanism and now is one of the places in the US that is becoming increasingly democratic.Report
It’s not a new argument. One of the conservative writers back in the 1990s (Buckley? Kristol?) said something along the lines of, “The global experience is that universal health care, once implemented, is so popular it is impossible to repeal.”Report
that was always wrong Kristol talking about hillary care in the 90’sReport
One possible answer is that the American people are stupid and/or delusional. I am guessing that Cruz does not believe this, and definitely does not want to argue it.
Actually, I wouldn’t put it past Cruz. Josh Marshall over at TPM went to college with Cruz and went back and talked to some of their fellow classmates. The consensus on Cruz is that he was smart, but a dick in the extreme. In law school, he refused to study with anyone not from Harvard, Yale, or Princeton. So, it doesn’t strike me as implausible that he thinks the majority of Americans are stupid. After all, that’s what the sugar addiction implies. Most people are just too dumb to know what’s good for them. Therefore, smart guys like Cruz need to protect them from what’s bad for them.
It is Romney’s 47 percent all over again, presented by a different flavor of elitist prick.Report
Yes, that’s possible. I really know nothing about the guy. He either thinks that or he thinks that Obamacare will make things go better. Either view is striking.
I hear what you all are saying, but health insurance “dependency” is different from welfare (although somewhat like Medicare and SS). The American people are not getting repeated “rewards.” I get the argument that welfare can create dependency and disincentivize people, and thus actually make things go worse for the recipient and the country. Who does Obamacare disincentivize? How is the dependency something that will make things worse for recipients or the country? If government dependency is bad simply because government dependency is bad, and not because it actually makes things go worse, that goes back to what I said: that he is making a rights argument, not a consequentialist argument. And I don’t think that is very popular.Report
There are/were several stories about businesses cutting hours so they would not have to comply with the employer mandate. Papa John’s was the biggest example in the media.
Liberals saw the actions as a whiney CEO
A conservative/libertarian might argue that employers are being disincentivzed from offering full-time employment because ACA compels them to provide healthcare.Report
The ACA makes a convenient scapegoat for decisions that are unpopular with employees, that’s for sure.
However, the practice of sub-32 hour jobs (to avoid benefits) is one that LONG predates the ACA and whose use was more and more common before Obama so much as signed the bill.
I’m sure the ACA has affected business, for good and for bad. I’m also sure the ACA has been the excuse for a lot of decisions that had squat to do with the ACA.Report
Morat,
Concurred.Report
NewDealer – that’s the argument he should be making. But that has nothing to do with sugar addiction, really. And Morat and NewDealer, concurred concurred.Report
I’m not sure what you’re getting at here, Rose. I think that for Republicans like Cruz any kind of government program, particularly a successful one, is bad. His ilk seems to be out to destroy government altogether, substituting private “solutions.” Obamacare, however, is pretty much of a private solution. It may put some restrictions on insurance companies but, overall, they’re likely to profit from it. They’re not going to be driven out of business. Most of the policy elements of Obamacare derived from right wing think tanks. There’s no public option. And there’s certainly no single payer. It’s Romneycare on a national level (a big problem for Romney during the election, no matter how hard he tried to deny it).
The addiction metaphor isn’t a good one in this case, but it’s part and parcel of the Republican argument against government in all forms. I think their objection boils down to two words: “government bad.” At heart, folks like Cruz are social Darwinists.Report
Michelle, what you say is exactly what I mean to be getting at. Except it’s not so much that the sugar addiction is a bad metaphor. It’s that it’s a revealing one.
The question is, what makes Obamacare bad? As you suggest, Cruz et al seem to repeatedly collapse into a position that government programs are *inherently* bad.
But I also think that’s not a popular view. So Cruzites condemn the negative effects that Obamacare will have. However, the sugar addiction analogy suggests that they do not believe it will actually have negative effects.
You said “I think that for Republicans like Cruz any kind of government program, particularly a successful one, is bad. His ilk seems to be out to destroy government altogether, substituting private ‘solutions.'” Yes! That’s exactly what I’m trying to say. That the sugar addiction analogy is saying that the program will be successful, and that is what makes it dangerous. And I believe that is ultimately an unpopular view.
You also said, “Obamacare, however, is pretty much of a private solution. It may put some restrictions on insurance companies but, overall, they’re likely to profit from it. They’re not going to be driven out of business. Most of the policy elements of Obamacare derived from right wing think tanks. There’s no public option. And there’s certainly no single payer.” Yes, totally. This is why the sugar addiction analogy makes absolutely zero sense. In the case of sugar addiction, people enjoy something that is actually bad for them in the long term. In Obamacare, they are getting private health insurance. So to what are people getting addicted? Simply a government-regulated private service. This is not the sort of dependency on government that makes people work against their own long-term interests. In short, it doesn’t make sense to argue that this is bad for people in the long term.
Unless you take at face value his argument that it kills jobs. But if you do, again, the sugar addiction analogy makes no sense. Because people are unhappy when jobs are killed. The American people have not shown an irrational addiction to unemployment. This is not something to which they’d be addicted like sugar.
“The addiction metaphor isn’t a good one in this case, but it’s part and parcel of the Republican argument against government in all forms.” Yes, this is exactly what I meant to say. That the sugar addiction metaphor is interesting because it actually reveals the fact that they are opposed to government programs in principle, even when they make people’s lives better.Report
“A conservative/libertarian might argue that employers are being disincentivzed from offering full-time employment because ACA compels them to provide healthcare.”
A conservative/libertarian would argue that if the government wants to pay for healthcare then they’re happy to let it. And that the government has, with the ACA, said “we want to pay for Americans’ healthcare, but we only want them to be employed part-time”.Report
Who’s going to pay for health care insurance? Three options present themselves: individuals, employers or the state. The bills must be paid by someone.
So who will it be? If it’s the individual paying for his own insurance, without participating in a pool of lives, nobody can calculate the odds and he pays far too much. The insurance companies love that. If employers pay, they are obliged to carry an onerous burden for each employee — and the fewer employees they have, the more akin to the problems of the individual payer their problem becomes.
State payers, well, that means taxation and pricing by fiat, that’s even worse. Some advantages, though. Volume discounting, smaller bureaucracies, meaningful statistics. Such a program could be run well but there’s no reason it has to be and many reasons why it wouldn’t be. And in the USA, nobody wants this option, especially not the government. We believe in markets.
What do the Libertarians tell us? Everything ought to be in the province of the individual. That’s so stupid it hurts. How can people be so ignorant of statistics and probability? Average results converge toward expected results as varies the number of lives in the pool. There is no telling these people anything. If you want Individual Responsibility, you guys will eventually have to confront the actual numbers.Report
… I mean, really. If you want Individual Responsibility for health care, you can have everything you want as long as you put everyone in the same pool of lives. Romneycare wanted a pure Individual Responsibility pattern, with the large pool of lives. His Democrat-dominated Legislature wanted more Employer participation. Romney vetoed it, but was overridden. Incorporates aspects of both.
That’s what the GOP should have done with ACA. Could have done, too. Just tell Obama, “You want health care, we don’t want the employer having to shoulder this scamful pool of lives problem — you can have everything but the employer mandate.” Just like Romneycare went down. I think Obama would have given it to the GOP.
Now if I’d been Obama, I would have given Romney a call the day after the election and say “Hey there, Mitt, have I got a job for you. I want you in my cabinet as with the mandate to administer government health care programs. I want you to go a-missionarying over there in Congress, I want you to go clean house over there in Medicare and Medicaid and do that voodoo what you do.” It would have worked, I swear it would have.
Romney’s oil portrait as governor of Massachusetts has a bound copy of his health care bill in it.Report
The employer mandate portion of RomneyCare was only repealed in MA this past summer. The reason for repeal was because ObamaCare has its own employer mandate so the MA mandate was seen to be superfluous.Report
@shannons-mouse : Thanks. Didn’t realise the employer mandate part had been repealed.Report
“What do the Libertarians tell us? Everything ought to be in the province of the individual. That’s so stupid it hurts. How can people be so ignorant of statistics and probability?”
The Libertarian would also say “fine, then; if you think that group coverage results in lower individual costs, then start your own group-coverage company and rake in the dough from all those potential customers”.
Of course, the Libertarian would also be fine with you saying “I don’t want any smokers because they have higher costs, if you ever smoked I won’t have you as a customer. I don’t want any obese people because they have higher costs, if you’re obese I won’t have you as a customer. I don’t want any black people because sickle-cell anemia and diabetes are expensive, if you’re black I won’t have you as a customer…”
…and we’re back to “healthcare is a right, not a privilege, therefore everyone ought to get as much as they need for free, because if you tell someone they can’t have a treatment they need then you’re telling them they should die”.Report
Heffman, would you please tell the folks how the size of a life pool affects probabilities? I really want to hear it from a Libertarian who understands the math. A man like you.Report
And Michelle, the Princeton, Yale, Harvard thing reminds me of something funny. I used to work with a woman (in the real work world, not academia) who went to Yale. I went to Columbia for undergrad. One day, she started reassuring me that Columbia was a “second-tier” Ivy. As in, I shouldn’t feel all that much intimidated by her, because Columbia was “just under” P, Y, and H. Although her order was Y, P, H. Very kind of her, no?Report
Personally, I’d want to piss in her coffee. I’m sure you handled her far more graciously.Report
Rose,
Did you ever see the Chronicle of Higher Ed article called “Brown and Cornell are second-tier”? Quite fascinating (in a horrible way) but there does seem to be entire highly insular yet important world where it is Princeton, Yale, Harvard or bust. This not only ignores Columbia, Penn, Dartmouth, Brown, and Cornell, it also ignores Vassar (my alma mater) and all similar schools which are still very hard to get into.
On the other point, I think the GOP simply opposes ACA/Obamacare because it came from a Democratic President and a Democratic Congress. They came up with these ideas when Clinton was on a verge to pass universal but now that their ideas are the starting point, they merely want the status quo. Depressingly I think the Waldman essay is right, the fever will never break, these are rump reactionaries.Report
Those of us who went to public universities might have something to say about that kind of snobbery too.Report
When it comes to economic policy, it is pretty obvious that most people don’t know what’s good for them. It’s not that they don’t know what they want—it’s that they’re very poorly equipped to determine what policies will give them what they want.Report
Or maybe we aren’t quite the economic animals that we are so often made out to be.
When people vote for economic policies that work against them (i.e., poor people voting for tax cuts for the wealthy), maybe it is because they value some notion of “fairness” or “rightness” in the tax code more than they value the bottom line on their checking account. Not necessarily consciously, mind you.Report
Similar to my earlier comments about health care not behaving like consumer goods-
In all of human history, virtually no one ever has paid for their own health care.
Parents have always paid for their children; Young adults always paid for their elders.
The idea that if it is somehow free, people will rush in to take advantage of it is laughable.
Suppose all health care were free tomorrow- what procedure would you rush out to get? A spleen removal? A spinal tap? Maybe treat your friends to a round of chemotherapy on the house?Report
This goes back to my primary suspicion — that there will be a run on doctors (there aren’t enough is the common refrain) by people who cannot afford to see doctors right now; there will be rationing for the people who are used to seeing a doctor whenever they want, as if there’s no rationing now.
But I also think this is all bolstered by a healthy dose of anything not Obama; Republicans defining themselves by some weird negative space of the president. It almost seems like an alcoholic in denial or an abuser who tells his/her victim the beating just meted out is their fault.
But through all of this, I think there’s one other big motive at play here that hasn’t received enough attention: the failures of government from 2000 to 2006. 9/11, two wars run off the books, the housing bubble and financial opaque markets that led the the economic bust, unfunded tax cuts, the failures of abstinence-only and many faith-based initiatives. Maybe Republicans are trying to suggest Obamacare (and government in general, which is why it’s okay to shut it down) are failures because they failed at governing.Report
But I also think this is all bolstered by a healthy dose of anything not Obama; Republicans defining themselves by some weird negative space of the president. It almost seems like an alcoholic in denial or an abuser who tells his/her victim the beating just meted out is their fault.
This. If Obama supports it, it must be bad.
Your second point is interesting, given that the Republicans controlled both the legislative and executive branches through most of 2000-2006. The logical conclusion to be drawn is that the party that hates government should be kept from governing because they don’t take it seriously.Report
The only complaint I have ever heard that had merit is that people will rush to the doctor for every sniffle.
I think its noteworthy that the big greedy insurance companies give away routine checkups like Haloween candy. They know that getting people to go to the doctor at the drop of a hat is money saved, actually.Report
The insurance companies hand out Free Checkups, to the vast annoyance of physicians everywhere. Doesn’t really catch that many serious conditions.Report
Blaise:
I think, monetarily, you can pay for a LOT of unneeded checkups by catching an infection before a patient goes septic, or catching cancer at stage I as opposed to stage IV.Report
On the suggestion that it’s Bush-era failure behind this, it seems that Daniel Larison posits the same thing.
Report
Blaise,
they do that so diabetics don’t get gangrene. it’s not so that the doctor can catch things, but so that he can recommend a regimen of checking their feet for rot.Report
I don’t buy it. Consider the problem of breast cancer diagnosis. Two problems present themselves: false positives and negatives. False positives lead to unnecessary treatment, false negatives also cloud the picture.
The statistics are really sad. You’d think the statistics would show women who got mammograms wouldn’t present with these late-stage cancers. But they do. Statistically the same as women who don’t get all those mammograms.
I’m not an oncologist. But I do a lot of health care statistics work. I see what this stuff costs. I’m not here to say you shouldn’t get a checkup. If you have a history of breast cancer in your family, get mammograms. If you’re a diabetic, you need care for a chronic condition. That’s not a “checkup” by my admittedly arbitrary parsing of the word. You can call it what you like. If you present with a medical condition, take your physician’s advice. Seriously, some people think it’s optional.
But if the physician has treated you, he’ll tell you whether or not you need to come back. Just presenting at his clinic and having him poke an otoscope in your ear and his finger up your patoot won’t mean you have a clean bill of health when you walk out. And all these tests can only give the physician some results. The physician makes the diagnosis.Report
If anyone is interested, studies have actually been done on the cost-effectiveness of “preventive medicine” including exams. Here is an article from the New England Journal of Medicine showing the economic loss of preventive medicine:
Here is a piece by David Katz where he makes the case that preventive medicine is indeed a moneysaver. Not exams, though:
Report
@will-truman thanks for posting that.
You’ve also highlighted what I say is the health-insurance industry’s big negotiating point here: they own the data necessary to affordably conduct efficacy analysis studies. This is complex and expensive, and not just predicated on cheapest cost, but on the balance of cost/quality-of-life outcomes.
(My husband worked on the data end of this for oncology studies for many years; not just the individual clinical trial, but efficacy studies comparing results of varying treatments.)Report
Blaise,
that’s what medical boards are for. they’ll run the numbers, and tell us when not to do mammograms (which was a recent one, I believe) — cervical cancer screenings are down too.
Ideally, we use annuals to get a decent baseline.Report
You’re just irritating me, Kim. First it’s about diabetic gangrene, now it’s about medical boards. Make up your mind. I say, and everyone who’s ever examined the problem, says “checkups” are a waste of time, a feel-good freebie offered by an industry that’s still marching headlong into the 1980s in terms of meaningful health care statistics.
The health insurance industry actively weakens the authority of the physicians, attempts to capture them in vertical markets, wastes their time and money with stupid bureaucratic bullshit, perpetuate a collective fraud upon the American people which makes Vegas card cheats look like Sunday School teachers — but hey, Yearly Checkups are free. Yeah, and Louis Pasteur just came out with confirmation of this amazing theory — germs cause disease!Report
@will-truman
Do those studies account for other economic factors?
In college, I got strep throat and didn’t know it. I knew I didn’t feel right, but I didn’t go to the infirmary (not for financial purposes, but I was 18, head strong, thought I was invincible, didn’t like doctors, etc.). I ended up feeling shitty for months. I stopped going out to eat because nothing tasted good and/or it hurt to swallowed. Class was miserable (and that was only going 15 hours a week). Had I been a full-time member of the work force, I undoubtedly would have been less productive during that time than had I not been ill.
Finally, a friend dragged me to the doctor and within two days the penicillin did its thing and I was back to normal. Had I gone to the doctor earlier, I would have contributed far more to the economy through various means simply because I would have felt better.
This isn’t an argument for regular exams, as that would not have caught what I had. But I put it out there to show that there is more to consider than just health care expenses. I’m curious if those can be accounted for in a meaningful way.Report
I don’t have time tonight, LWA, but if I did I would disagree with pretty much everything you wrote, or at least the ramifications. Unfortunately I will need to pass. Maybe tomorrow…Report
Zic,
Check out the Waldman essay. It is the authoritarian mindset in action.Report
Rose, thank you for writing this. It makes me feel like the real problem is that Republicans think Obamacare will work. And they cannot bear to have President Obama be successful, so they’ve got to stop it come hell or high water.
But the affirmation — that it will work — that’s a good think to ponder.Report
Particular thing I’ve never gotten about conservative rhetoric on it is it seems to shade from “This health reform law is bad” into “anything resembling collective responsibility with regard to health care is bad”. The latter seems to oppose the very concept of insurance (a pool of resources in a group set aside for when crappy situations come up among particular members), no?
As for opposition because it’s not left enough, I’d count in that figure in a way. While I would ideally prefer the issue of people being unable to afford healthcare be addressed by a combination of mutual aid, dismantling of measures that make it artificially expensive, and rise in incomes via radical labor movement all without government, if this is not forthcoming I’d slot in at #2 a move straight to single-payer. What the hell, if we’re going to be required to pay in some form by government anyway within the current warped structure, just cover everybody and get it over with.Report
Particular thing I’ve never gotten about conservative rhetoric on it is it seems to shade from “This health reform law is bad” into “anything resembling collective responsibility with regard to health care is bad”. The latter seems to oppose the very concept of insurance (a pool of resources in a group set aside for when crappy situations come up among particular members), no?
There is a difference between people choosing to pool their money in the way that works makes the most sense for them, and being forced to do it with no consideration of individual circumstances. Forcing insurance companies to disregard the expected cost of an individual when determining premiums results in healthy people paying more to cover unhealthy people. If someone chooses to live an unhealthy lifestyle, and that increases their healthcare costs, it costs everyone. If gives people a vested interest in the health of other people. The argument for intrusive laws, such as limiting soft drink sizes or controlling the amount of sugar, becomes stronger.
If I am covering the cost of my own healthcare, and I choose to keep myself fit. If I sacrifice the time required to exercise and sacrifice the hedonistic pleasures of junk food, along with the physical benefits, there can be financial benefits. I can choose a high deductible insurance plan, to cover emergencies, without too much worry. Unless the mandate has changed from earlier versions, that is no longer an option.Report
That’d be a great argument against someone that supports the law. I don’t. It’s basically a huge gift to insurance companies.Report
RR,
we’re keeping the pay you $2000 to actually stay fit part of the health plan, hereabouts.Report
It’s basically a huge gift to insurance companies.
I’m not so sure about that, myself. When the final version of the PPACA bill which became law was being debated I remember being outraged (OUTRAGED!) by the giveaway to insurance companies. Now I’m not so sure. On the one hand the PPACA caps medical-loss ratios which limits the amount of profit a firm can generate; and on the other it permits firms to compete against each other within that limit. That ought to be establish an incentive for firms to provide better products and customer service and gobble up market share thataways.
Maybe this particular objection relies on some other criticisms to be fully felt, tho.Report
From what I’m hearing, nobody’s sure if it’s a gift or not. PPACA at present is a kinked-up garden hose. We’re not quite sure what’s going to happen once it all gets going but we are working out the kinks. Happens every time a new market forms. There’s sure to be some chicanery until the pit bosses have figured out how the cheats are doing it.
Personally, I think it’s no accident the GOP chose this exact time for the government shutdown, just as PPACA was going into effect.Report
“Particular thing I’ve never gotten about conservative rhetoric on it is it seems to shade from “This health reform law is bad” into “anything resembling collective responsibility with regard to health care is bad”. ”
Could you give us some quotes, please? Because it’s important to make sure that you’re talking about actual conservatives rather than the ones you’re imagining inside your head.Report
It’s fairly routine among the rank-and-file of the movement to remark at some point “why should I pay for THEM?” A logic which if followed literally would call for throwing a fit any time a customer of the same insurance company you use got sick, as that’d mean they’re withdrawing (paying medical bills) as you’re still depositing.Report
“It’s fairly routine among the rank-and-file of the movement to remark at some point “why should I pay for THEM?””
Oh, that darn rank-and-file, always ranking and filing everywhere.
Of course, for what you’re saying to be true, the rank-and-file would actually have to be in charge, which means that they aren’t so much the rank-and-file anymore.Report
Oh, that darn rank-and-file, always ranking and filing everywhere.
Okay, that was pretty funny.Report
As a diabetic I object to any sugar at all: frutose, HFCS, sucrose, glucose, etc. and especially gov’t sugar.
Please pass me a slice of bacon.Report
It makes more sense if you disaggregate it. The degree to which one receives the benefits of a government program and the degree to which one bears the costs don’t correlate very well. “The people might like this government program too much and then we’ll never get rid of it” sounds weird if you think of “the people” as some kind of uniform collective. But when you take into account that the cost and benefit distributions are very different, it’s not so weird after all.
Take Medicare, for example. The benefits are distributed widely, but the costs are highly concentrated among high wage earners, since the tax is proportional to wage income, and the program is subsidized heavily by general revenues, which come mostly from the highly progressive personal income tax. So Medicare is a pretty sweet deal for most people, but only because someone else is subsidizing them.
Voter ignorance is another issue. Most people lack even a rudimentary grasp of economics and really have no idea what the economic consequences of certain policies are (heck, even economists often don’t agree, but there are issues where economists are broadly both in agreement with each other and at odds with the public). That a particular program is popular with the public really tells us very little about whether it’s a good idea.Report
Aren’t FICA taxes capped at like 150k income? And not taxed at all on capital gains?
So wouldn’t that mean the price falls most heavily on the middle class, and basically not at all on the wealthy?Report
Though social security taxes are, Medicare taxes are not capped.Report
But not on gains? (Seriously, I’d be a lot happier with the US tax setup if capital gains were treated like income. Sure, deduct losses. Only tax when gains are realized. Fine. But if I make a 100k from my work or a 100k from my investments, I don’t see why they should be taxed differently. It’s not like the US is suffering from an investment drought).Report
Capital gains taxes afflict the elderly most heavily. Prudent people invest over the course of their working lives and stupid people just borrow their way to prosperity and pay interest, the greatest tax on stupidity ever invented, though state lotteries are a close second. Taxing capital gains too heavily means people won’t invest their money where it will do some good. American firms are competing for those dollars. I want to see lots more ordinary people become investors, not borrowers.
Which isn’t to say we shouldn’t tax capital gains, mind you. The markets will bear some taxation. It’s not wise to treat payroll taxation the same way we treat capital gains. They’re fundamentally different propositions. Here’s one place where I believe we might resort to some policy-based AI to sort out how such reforms could be effected.Report
Capital gains taxes afflict the elderly most heavily
Pensions, 401ks and Social Security are taxed as gains? Really? Because I find that really surprising, and those three account for, well, the bulk of the income for the elderly. The vast, vast, vast majority of the elderly. Heck, even among the 30s and 40s and 50s something — 401k is pretty much the investment vehicle for the middle-class. (The poor don’t invest at all, obviously) — and I know withdrawals aren’t taxed as gains.
Taxing capital gains too heavily means people won’t invest their money where it will do some good. American firms are competing for those dollars. I want to see lots more ordinary people become investors, not borrowers.
I’d buy that a lot more if (1) We weren’t suffering from a massive glut of investment funds and (2) We hadn’t already taxed gains at the same rate as income, and seen basically no difference in investment patterns, amounts, or risk.Report
C’mon. The 401K is a great idea but not everyone can get into one. SocSec is good, too, but it’s only backed by ultra-safe bonds. Again, anything you can come up with to get more people to invest money in markets is excellent. The poor need to get on board the bandwagon of capitalism, too.
No excuse for all this whiny po-mouthing from liberals about how the Greedy Capitalists are just screwing Ordinary People. Everyone’s greedy. And nobody’s going to get rich working for a living. Capitalism says money is power. Liberals need to get off their dead asses and quit acting like skim milk socialists. If you want to empower someone, nothing like teaching him to empower himself. And if money is power, investing is how you get more of it.Report
Unfortunately, an army of “financial advisors” have been paid handsomely by the investment giants to “educate” us and the corporate HR 401K gatekeepers that we are best empowered by dumping our 401K savings into high-expense, actively managed investments.Report
morat,
yup, 401Ks are taxed as income. You pay years and years later, of course, but you are taxed.
Personally, I favor a tiered tax system, just like what we do with income tax. Same schedule would be nice, but if you’ve got to tax one heavier than the other, let it be cap gains at high numbers (you’re making over a million on cap gains, you’re gonna pay).Report
Shannon,
Try an IRA. At least that’s taxed NOW, not later. I don’t trust later to have decent tax rates.
Boomers are especially vulnerable to “later”Report
Blaise: The poor need to get on board the bandwagon of capitalism, too.
With what money?
When I see articles about how many people aren’t saving enough for retirement, I think about how often just to pay my bills I have to stick to ramen noodles, get p*yd*y loans (there may be a filter here on that word by now, so), or even beg friends. Sure, I’ll make sure to get right on setting aside that 15% of jack squat I have left over every month…Report
Think about how a mortgage interest deduction works now. People go out and borrow money, pay so much interest a month, get to take it off their taxes. What if you don’t have a mortgage interest deduction? It’s the largest deduction most people take on their taxes. Takes the bite out of paying a mortgage, especially the first few years, when it’s almost all interest and very little principal.
Now envision a system where you could park some of your money, even in very small sums, into tax-deductible investments. Not through your employer, off his bad-Chinese-restaurant steam table of offerings, you choose the investment yourself. Sorta like in a Roth IRA, only it’s easier to get into and out of for various reasons. Lets you save money for more than just retirement. Any capital investment is a viable target for the money and any other capital investment can be substituted, but it has to be capital to avoid taxation.
You poke money in the hole, tax-free, you can mess around with it on the other side, but if you pull it out, you pay a fraction of your gains, not much, the whole point is to squirrel the money away for a car or a house or some other non-capital item — retirement if that’s your goal, for young people, it wouldn’t be, they might be saving for a down payment on a house, hopefully a nice big down payment. If they had any sense, they’d leave it in there for a good long while, let it grow. But they might need it sooner. Who knows? The point is, you have to do more than save for a rainy day. You have to invest.Report
“The degree to which one receives the benefits of a government program and the degree to which one bears the costs don’t correlate very well.”
@brandon-berg
That works in both directions. How much do the wealth pay for FDIC protection? How much do they stand to benefit from it?Report
The truly wealthy aren’t really protected by FDIC. To be fully protected by FDIC, Bill Gates would have to open 288,000 bank accounts, each in separate banks. There are roughly 7500 banks in the USA.
The wealthy are protected by SEC and CFTC, who regulate stock markets and commodities futures exchanges, respectively.Report
The 401K is a great idea but not everyone can get into one. SocSec is good, too, but it’s only backed by ultra-safe bonds
You claimed the “capital gains tax” affected the elderly disproportionately. However, by numbers, the vast, vast, VAST bulk of Americans — elderly included — are invested in stocks solely through 401ks or pensions.The income from which is NOT subject to gains.
Success or failure of 401ks is immaterial. THAT is the investment vehicle through which the middle class invests in stocks, and it is taxed as income — not gains — upon retirement.
Basically put: You’re wrong. It doesn’t matter if the 401k is a mug’s game or how awful SS is. Capital gains falls most heavily on the rich, because they are the ones with excess capital to invest. The vast bulk of the middle class invests through 401ks if they invest at all.Report
Yes, I do claim capital gains taxes attach to the elderly. 401K is usually a rip-off. Check out that link, I’m not here to spoon feed you, Morat. The middle class is being swindled and the poor are shut out entirely. The 401K exists because of an obscure loophole. It was never meant to be your retirement fund.
Yes, the majority of capital gains are paid by the rich, on a dollar basis, because they are exposed to meaningful markets. But that doesn’t mean the elderly aren’t disproportionately affected: these prudent oldsters salted away their money in decent funds or equities or bonds or what have you — and they’re being hammered. That’s a fact. Middle class older people.
The 401K is not a meaningful marketplace: you only get to choose from the ridiculously overpriced offerings on your employer’s steam table. If the USA was remotely interested in turning poor people into middle class people, they’d structure the taxation system to create investors and not borrowers. So spare me all this tub-thumping.Report
at doesn’t mean the elderly aren’t disproportionately affected: these prudent oldsters salted away their money in decent funds or equities or bonds or what have you — and they’re being hammered. That’s a fact. Middle class older people.
Blaise, I can’t tell if you’re desperately trying to change the subject or just fixated on your 401k rant that you’re ignoring my point.
The elderly are not exposed to capital gains in any meaningful amount, because the vast bulk of the elderly do not own stocks or bonds. Their income comes from pensions and SS.
The middle class is not exposed to capital gains in any meaningful amount, because the vast bulk of their investments are in 401ks. It does not matter HOW crappy the 401k is. I stipulate it is a steaming, festering pile of horse crap. That still doesn’t change reality, which is that for the vast, vast, VAST bulk of Americans their only exposure to ‘investment’ is via 401k which is not taxed as gains.
I realize that you apparently have a giant, giant interest in this being not the case, that you feel economic nirvana might flow from Americans investing OUTSIDE the 401k and thus you don’t want capital gains to be taxed as income because this might slow down the onrushing investment utopia. Doesn’t matter because you’re still absolutely wrong on your “The capital gains tax falls mainly on the elderly”. It does not, because most old people don’t own any flipping stocks or bonds. They get SS or pensions.
My peers? The 30 to 50 crowd — upper middle class? Maybe 1 in 10 of us own investments outside our 401ks. Changes in INCOME TAX RATES will be far, far more of an imposition than changing the capital gains rate.
(And by and by: Gains used to be taxed as income. Every study has shown? No investment boom was caused by slashing the rate. Nor was an investment slump caused when Clinton raised it. Turns out? The vast majority of money invested in stocks isn’t that sensitive to 15% versus 28%).Report
Of course capital gains taxes fall disproportionately on the elderly. What do you think happens to rich middle-aged people? They become even richer elderly people.
Also, you’re missing the point. It’s not just that lower capital gains rates encourage higher savings rates—they enable higher savings rates. What do people do with their investment income? They reinvest it. The lower the capital gains taxes, the more investment income can be reinvested.
And please, for the love of god, not this nonsense about investment income being privileged taxwise again. I’ve debunked this here multiple times. Even if we put aside the more esoteric issues, which are a really big deal, there’s no excuse for ignoring the corporate income tax.Report
Brandon,
Not all investment income is accorded the corporate income tax. Notably, California bonds are state tax free for CA residents. I could cite you Schedule K, but I doubt you’ve ever invested on it.Report
I’m a Liberal. I think everyone should get a piece of the pie. I’d prefer the system work on their behalf so they can get a nice big slice.
Of course the oldsters don’t have any investments, other than their homes, maybe. Got all those mortgage interest deductions, though. The banks love that one. Who made all the money on that paid interest? Sure wasn’t the guy paying it. The guys who made all that interest turned it into strips and swaps and eventually into the crookedest, most unregulated, destructive financial instrument known to mankind, the unregulated credit default swap.
Pensions? Don’t make me laugh.
But being a Liberal does not mean I’m an innumerate idiot. If any system is to work on behalf of the poor and lowly, the working man and his children, I want that system to be Capitalism. No excuse for the most powerful nation in the history of the world rigged completely bass-ackwards, creating a nation of borrowers and not investors. It’s entirely possible to have a larger investor class and a tolerable taxation rate, both. It’s a question of how much you want the camel of capitalism to carry. It’s a good strong camel and it’s gotten through the desert before. Just don’t overload it.Report
BlaiseP:
Then when convincing people of that, you should not use statements like “Capital gains falls mainly on the elderly” (it doesn’t), and you probably SHOULD address the fact that despite the capital gains rate varying rather wildly over the last few decades, the actual rate — whether 15% or 30% — does not seem to affect how much is invested.
So while I am gung-ho about the whole ‘investment’ thing, I am not sold on “taxing gains at a lower rate than income” when in actual practice this (1) does not affect how much and how often the vast bulk of Americans invest and (2) amounts to the very, very, very well off paying a lot less in taxes than everyone else, since the bulk of their ‘income’ is gains and not that crappier, higher taxed ‘labor’ BS.
So if you want to sell people on more investment,you should probably not hitch your horse to a lower capital gains rate until you can show it actually makes a difference (hard, since historically that has not been the case. Well, it does lead to sell-offs if the rate is going to go up, but that’s a brief thing. Probably harder given the fact that the stagnant wages of the middle class mean they have less to invest than ever).
Asserting it does, in fact, make a difference just leads to me saying: “Prove it”.Report
Sigh. Capital gains taxes are incurred when people take their profits out of the market. If taxation rates are too high, people will not invest in the equities market. They will ride the investment tricycle of the 401K, which like health insurance, is mostly offered by the employer, who makes a tidy sum on my money. A 401K a little chink in the armour of the employer. It’s the only move for most working people. And, as I’ve pointed out, the 401K is a bad joke.
I’m self-employed. I’ve got a nice check on my desk, just arrived in the mail today. I don’t have the luxury of a 401K. I’m no spring chicken, I’m thinking about retiring. Got any investment strategy for me, Morat, one which would provoke me not to spend these shekels and put them into my brokerage account? I hate paying cap gains. Schedule C kills me, every year. My tax guy is very gloomy about my prospects.
You need to prove cap gains don’t fall predominantly upon the elderly. I say they do.
Finally, it should be noted that cuts in capital gains taxes particularly benefit the elderly. The elderly are two and a half times as likely to realize capital gains in a given year as are tax filers under the age of sixty-five. The elderly are also likely to derive a larger share of their income from capital gains than are younger workers.Report
Blaise: So you’ve asserted. I’ve asked you to prove it. According to the CRS, surveying 60+ years of investment patterns and capital gains rates, no actual change in savings rates materialized despite the capital gains rate dropping from 28% to 15%.
They aren’t alone. Lots of people have looked at it, with lag times of up to several years, and changes to the capital gains rate (at least between 15% and 30%) simply don’t do what you’re saying they do.
It might be an article of faith to YOU that raising the rate will lower investment, but the real world disagrees.
As for your elderly comment: Come on, Blaise. Neither of us is stupid. Only a tiny, tiny percentage of the elderly own stock. Most of them are rich. Most Americans only own stock in 401ks.
Your original objection is still stupid. You know how many elderly, as a percentage of the US population of old farts, owns stocks outright? Not many. You know how many of those are gonna suffer from a 28% rate (which they pay on their SS) as opposed to a 15% rate? Pretty much none.
But you’re obfuscating the heck out of that, because what you wanted people to believe was that taxing gains like income would put granny into the poor house, because granny’s poor, frail self is so marginal in terms of income that that difference is major to her.
When in fact, aside from really rich grannies, most grannies don’t give a flip about the capital gains rates because they don’t own stock.
If you’re talking about people that own stock, once you’ve excluded 401ks (which you have to, if you’re talking capital gains) you’re talking 10% or less of America.Report
I did furnish a link. You may choose to accept it as evidence or not. But I will not be hectored with empty words. Put up. Or shut up. It’s that simple.Report