[SPORK] Gephardt's Plan

Jeff Bone jbone at deepfile.com
Fri Apr 25 12:54:06 PDT 2003

So I'm really caught on the horns of a dilemma over this one.  
Gephardt's selling the nasty Old Democratic party line:  steal more 
from the rich, who of course don't need all that extra non-utility 
anyway, and use it to further socialize medicine, bulk up federal 
gov't, and give health care to the poor.  Ugh.  OTOH, it's clear that 
Bush's plan is prima facie stupid:  huge tax cuts for the wealthy while 
we increase spending and run up huge debts.

Why can't somebody come out and sell the hard, unpopular, and 
absolutely necessary line:  in order to get the economy moving again, 
we need tax cuts that are meaningful across the board ("neither a 
supply- nor a demand-sider be") while continuing to deeply cut programs 
as necessary to run our federal gov't at net-zero or a surplus?

More partisan crap as usual...

FWIW:  the reason medicine is prohibitively expensive in the first 
place is the insane regulatory overkill and its attendant costs.  The 
regulations in question typically have to do w/ that most expensive 
aspect of any service business, labor requirements --- staffing needs 
(must have this type of doctor on call, these sorts of nurses, etc. 
etc.  Rural hospitals often have to contract with these people from 
out-of-area to cover regulatory requirements, e.g. on weekends, etc. 
when the local doctors are out --- even though these medical 
mercenaries are never actually needed or used.)

Secondary to this is the cost in time and personnel to process all the 
paperwork for the current socialist medical payment programs we have 
--- hugely inefficient.  One net effect of all of this is that smaller 
hospitals, particularly in rural areas, are being forced out of 
business or onto a local tax-supported basis, using still more public 
money to pay for the costs of unnecessary federal and state regulatory 
policies.  Our policies are *directly* driving that industry towards 
centralization and consolidation, since the only entities that can 
operate profitably are those that can achieve economies of scale and 
have a local population sufficient to support them.


fyi, Krugman is a world class economist, has served in both Republican 
Democratic Administrations, is currently a proffessor at Princeton, I
believe, and is a prolific economic/political writer.


Roads Not Taken

Congressman Richard Gephardt's new proposal ? to scrap the 2001 tax cut
and use the reclaimed revenue to provide health benefits to the 
? has been widely dismissed as unrealistic. And in political terms 
probably true. After all, these days it's considered "moderate" to 
an irresponsible tax cut that is merely large, as opposed to gigantic.

  But today I'd like to take a holiday from political realism, and ask a
naïve question: Why shouldn't the American people favor a proposal like
Mr. Gephardt's? Never mind the details; why shouldn't the typical
citizen, faced with a choice between Bush-style tax cuts and a plan to
provide health insurance to most of the uninsured, choose the latter?

  Of course, originally tax cuts weren't supposed to require sacrificing
something else. In the 2000 campaign, and up through the passage of the
2001 tax cut, George Bush insisted that there was plenty of money for
everything. But there wasn't ? and now, having returned to an era of
deficits, we are told that social programs must be shrunk even as taxes
are cut further. Why not choose a different road?

  Most Americans were never going to get much of a tax cut, anyway. If 
the Bush tax cuts ? those actually passed in 2001, and those the
administration is now pushing ? were fully in effect, they would reduce
annual taxes collected per family by about $2,500. But averages can be
deeply misleading. When Bill Gates enters a bar, the average net worth 
the patrons soars, but that doesn't make everyone in the bar a

  So it is with the tax cuts, which bestow most of their benefits on the
very, very affluent. Most families, as best I can estimate, will see
their taxes fall by less than $800 ? in many cases, much less. 
a handful of people will benefit hugely: the top 1 percent of families,
with incomes averaging more than $1 million, will get tax breaks to the
tune of $80,000 each.

  On the other hand, ordinary families would benefit greatly from a plan
that provided health insurance to those now uninsured.

  It's true that at any given moment most middle-income families have
insurance. But people lose their jobs, companies go bankrupt, and
benefits get suddenly slashed. Over any given two-year period, roughly a
third of Americans spend some time without health insurance; over longer
periods, the risk of losing health insurance is very significant for 

  Would ending that risk be worth several hundred dollars a year to the
typical family? (It doesn't have to be worth $800: Mr. Gephardt's plan,
which would provide increased tax credits to employers, would also lead
to higher wages, offsetting some of the tax-cut reversal.) Yes, without

  When a family without health insurance suffers illness, the results are
often catastrophic ? either serious conditions go untreated or the 
faces financial ruin. Our inadequate insurance system is one important
reason why America, the richest country in the world, has lower life
expectancy and higher child mortality than most other advanced nations.

  So why should tax cuts take priority over health care? I know the party
line: tax cuts for high earners are the key to economic growth, and a
rising tide lifts all boats. But there's not a shred of evidence
supporting that claim. More than two decades after the supply-siders
launched their tax-cut crusade, ordinary workers have yet to see a 
tide. The median real wage is only 7 percent higher now than it was in
1979, with all of that increase achieved after Bill Clinton raised taxes
for the top bracket.

  If American families knew what was good for them, then most of them ? 
but a small, affluent minority ? would cheerfully give up their tax cuts
in return for a guarantee that health care would be there when needed.
And even the affluent might prefer to live in a society where no sick
child was left behind.

  O.K., back to political reality. Nothing like Mr. Gephardt's plan is
going to become law anytime soon. On the contrary, the right is likely 
ram through even more tax cuts, while using deficits as an excuse for 
helping the uninsured. But we have the right to ask why. And claiming
that those who don't support tax cuts are somehow unpatriotic is not an

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