Mitt Romney has made a big deal out of President Obama’s decision to grant requests by governors from both parties for more flexibility in the work requirement in TANF, the reformed welfare program. The question that millions are now asking is whether the NYT has a work requirement for its reporters. David Leonhardt’s piece on Mitt Romney’s first 100 days suggests otherwise.
One of the big questions that serious people have been raising is how Governor Romney proposes to pay for the large tax cuts for the wealthy that his plan would provide. Romney has claimed that he would pay for these tax cuts by eliminating tax deductions. The Tax Policy Center of the Brookings Institution and the Urban Institute claim that this plan does not add up. It would be necessary to substantially reduce or eliminate the mortgage interest deduction, the deduction for employer provided health care and other deductions for middle income taxpayers to make up the lost revenue.
In dealing with this problem, which implies that Romney would impose a substantial tax increase on millions of middle income families, Leonhardt refers us to a proposal by Representative Ryan which would allow people to pay taxes under the current schedule or use the new lower tax rates. Does this add up? Can a plan that provides a tax cut to everyone who knows arithmetic (or knows someone who knows arithmetic) produce the same amount of revenue as the current tax system?
It’s Leonhardt’s job to investigate this issue. I’m sure that he is a busy guy, but he has more time and probably more expertise to examine this issue than most of his readers. It is incredibly irresponsible to pretend that numbers add up when they don’t. If Leonhardt didn’t have the time to assess this key point, then he didn’t have time to write the piece.
Mitt Romney has made a big deal out of President Obama’s decision to grant requests by governors from both parties for more flexibility in the work requirement in TANF, the reformed welfare program. The question that millions are now asking is whether the NYT has a work requirement for its reporters. David Leonhardt’s piece on Mitt Romney’s first 100 days suggests otherwise.
One of the big questions that serious people have been raising is how Governor Romney proposes to pay for the large tax cuts for the wealthy that his plan would provide. Romney has claimed that he would pay for these tax cuts by eliminating tax deductions. The Tax Policy Center of the Brookings Institution and the Urban Institute claim that this plan does not add up. It would be necessary to substantially reduce or eliminate the mortgage interest deduction, the deduction for employer provided health care and other deductions for middle income taxpayers to make up the lost revenue.
In dealing with this problem, which implies that Romney would impose a substantial tax increase on millions of middle income families, Leonhardt refers us to a proposal by Representative Ryan which would allow people to pay taxes under the current schedule or use the new lower tax rates. Does this add up? Can a plan that provides a tax cut to everyone who knows arithmetic (or knows someone who knows arithmetic) produce the same amount of revenue as the current tax system?
It’s Leonhardt’s job to investigate this issue. I’m sure that he is a busy guy, but he has more time and probably more expertise to examine this issue than most of his readers. It is incredibly irresponsible to pretend that numbers add up when they don’t. If Leonhardt didn’t have the time to assess this key point, then he didn’t have time to write the piece.
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It is remarkable that in a campaign season where the media are constantly telling us that the election is a referendum about the size and role of government, no one seems to have noticed that the jury’s verdict in the Apple-Samsung case is a big victory for big government. The ruling gives strong protection to Apple’s patents, which means that it will be able to charge more money for its iPad, iPhone and other related products in the years ahead. The additional charges could well run into the hundreds of billions of dollars over the next decade.
From the standpoint of consumers this has the same effect as if the government imposed a large tax on these products. However in this case, the government is simply agreeing to arrest competitors so that Apple can effectively impose the tax.
This is big government interference in the free market. Remarkably no reporters treat it as such. For some reason if it is not tax or spending policy, reporters generally fail to recognize the hand of the government. This is unfortunate since the impact of the government’s actions in setting the ground rules for the market swamps the impact of the tax and spending decisions that dominate public debate.
[Addendum: For the record, I don’t have strong views on this case. In general I am not a fan of strong patent/copyright protection, but I haven’t studied this one enough to see the extent to which Apple has a serious case. On the other hand, there is zero doubt that if the ruling holds, Apple will be charging more for its products than if doesn’t.]
It is remarkable that in a campaign season where the media are constantly telling us that the election is a referendum about the size and role of government, no one seems to have noticed that the jury’s verdict in the Apple-Samsung case is a big victory for big government. The ruling gives strong protection to Apple’s patents, which means that it will be able to charge more money for its iPad, iPhone and other related products in the years ahead. The additional charges could well run into the hundreds of billions of dollars over the next decade.
From the standpoint of consumers this has the same effect as if the government imposed a large tax on these products. However in this case, the government is simply agreeing to arrest competitors so that Apple can effectively impose the tax.
This is big government interference in the free market. Remarkably no reporters treat it as such. For some reason if it is not tax or spending policy, reporters generally fail to recognize the hand of the government. This is unfortunate since the impact of the government’s actions in setting the ground rules for the market swamps the impact of the tax and spending decisions that dominate public debate.
[Addendum: For the record, I don’t have strong views on this case. In general I am not a fan of strong patent/copyright protection, but I haven’t studied this one enough to see the extent to which Apple has a serious case. On the other hand, there is zero doubt that if the ruling holds, Apple will be charging more for its products than if doesn’t.]
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Okay folks, mark August 25, 2012 in your calendar. That is the day that Matt Miller clearly stated on the Washington Post op-ed page that the problem is not Medicare, but the broken U.S. health care system. Miller noted that we spend more than twice as large a share of our GDP on health care as the average for other wealthy countries and have little to show for it in terms of outcomes.
He attributes this additional expense to the medical-industrial complex. Miller tells readers:
“It’s [health care entitlement reform] about weaning the members of our medical-industrial complex from their entitlement to far higher payments, despite shabby results, than their counterparts abroad get.”
Oh yeah, there it is folks, sitting there for all to see on the op-ed page of the Washington Post, truly amazing. (In fairness, Ezra Klein has made this point many times on his blog.)
So Matt Miller deserves a warm welcome to the reality based community. And the Post op-ed page editors should be congratulated for allowing a serious discussion of health care.
The next question is whether we can talk about some measures to address the problem. My favorite starting point is some free trade in health care: allow Medicare beneficiaries buy into the more efficient programs elsewhere and split the savings in the government. Unfortunately the Post is probably too ideologically committed to protectionism to ever allow an idea like this to appear in the paper.
Okay folks, mark August 25, 2012 in your calendar. That is the day that Matt Miller clearly stated on the Washington Post op-ed page that the problem is not Medicare, but the broken U.S. health care system. Miller noted that we spend more than twice as large a share of our GDP on health care as the average for other wealthy countries and have little to show for it in terms of outcomes.
He attributes this additional expense to the medical-industrial complex. Miller tells readers:
“It’s [health care entitlement reform] about weaning the members of our medical-industrial complex from their entitlement to far higher payments, despite shabby results, than their counterparts abroad get.”
Oh yeah, there it is folks, sitting there for all to see on the op-ed page of the Washington Post, truly amazing. (In fairness, Ezra Klein has made this point many times on his blog.)
So Matt Miller deserves a warm welcome to the reality based community. And the Post op-ed page editors should be congratulated for allowing a serious discussion of health care.
The next question is whether we can talk about some measures to address the problem. My favorite starting point is some free trade in health care: allow Medicare beneficiaries buy into the more efficient programs elsewhere and split the savings in the government. Unfortunately the Post is probably too ideologically committed to protectionism to ever allow an idea like this to appear in the paper.
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The Washington Post has long been known for its sycophantic coverage of the rich and powerful but it may have hit a new low today. The theme of an article on the presidential race was that Representative Paul Ryan, the Republican vice-presidential candidate, used the word “baseline” in a discussion of the budget with reporters. The reporter and/or editor was just incredibly impressed with this fact.
Real reporters might ask Ryan to identify some of the loopholes that he plans to close to make up for his tax cuts to the wealthy (e.g. mortgage interest deduction, deduction for employer provided health insurance etc.). A real reporter might also ask him to be more specific about the programs he plans to cut or eliminate over the next decade to meet his spending targets. And, they might ask him if he really intends to eliminate the whole federal government by 2040, except for Social Security, health care and the Defense Department as the Congressional Budget Office’s analysis of his budget implies.
But hey, those would be questions raised by real reporters. The Post is just so awed by the fact that Ryan used the word “baseline,” wow!
The Washington Post has long been known for its sycophantic coverage of the rich and powerful but it may have hit a new low today. The theme of an article on the presidential race was that Representative Paul Ryan, the Republican vice-presidential candidate, used the word “baseline” in a discussion of the budget with reporters. The reporter and/or editor was just incredibly impressed with this fact.
Real reporters might ask Ryan to identify some of the loopholes that he plans to close to make up for his tax cuts to the wealthy (e.g. mortgage interest deduction, deduction for employer provided health insurance etc.). A real reporter might also ask him to be more specific about the programs he plans to cut or eliminate over the next decade to meet his spending targets. And, they might ask him if he really intends to eliminate the whole federal government by 2040, except for Social Security, health care and the Defense Department as the Congressional Budget Office’s analysis of his budget implies.
But hey, those would be questions raised by real reporters. The Post is just so awed by the fact that Ryan used the word “baseline,” wow!
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Both the NYT and USA Today have convinced themselves that house sales are well below their trend level, with the latter telling us that a 5.5 million annual sales rate of existing homes considered healthy. In fact, we are pretty much back to trend levels of sales. In the mid-90s before the bubble began to distort the market, sales averaged about 3.5 million a year. A simple adjustment for the 15 percent population growth over this period would imply an annual sales rate of 4 million existing homes. That is somewhat below the current 4.5 million sales rate.
The gap between the current sales rate and the trend more than makes up for the continued weakness in new home sales. So, what are these folks talking about?
Both the NYT and USA Today have convinced themselves that house sales are well below their trend level, with the latter telling us that a 5.5 million annual sales rate of existing homes considered healthy. In fact, we are pretty much back to trend levels of sales. In the mid-90s before the bubble began to distort the market, sales averaged about 3.5 million a year. A simple adjustment for the 15 percent population growth over this period would imply an annual sales rate of 4 million existing homes. That is somewhat below the current 4.5 million sales rate.
The gap between the current sales rate and the trend more than makes up for the continued weakness in new home sales. So, what are these folks talking about?
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He didn’t use exactly those words, but that is one implication of his column on Paul Ryan’s decision to not support the Bowles-Simpson deficit plan when he was a member of the deficit commission back in 2010. (Brooks attributes Ryan’s action to his hope for a larger scale overhaul of Medicare. More cynical types might attribute it to his adherence to the Republican dogma of never supporting tax increases.)
Anyhow, fans of the Bowles-Simpson report might recall that it would have first put budget cuts in place in October of 2011. The projected deficit for fiscal year 2013 (Figure 2), which begins on October 1 of this year, is less than 4.0 percent of GDP. The people running around Washington worried about the end of the world fiscal cliff scenario are worried about tax increases and spending cuts that will shrink the deficit to 4.0 percent of GDP as of January 1, 2013.
The timing of the tax increases and budget cuts in the Bowles-Simpson scenario is obviously somewhat different than the fiscal cliff story, and it does assume a stronger growth path than we have actually seen, but it is more than a bit bizarre to see many of the same people who have been screaming about the horror of large deficits now terrified by the horror of large deficit reduction.
Just to be clear, deficits are needed now. There is nothing other than the budget deficit to replace the private sector demand we lost when the housing bubble collapsed. But you don’t get to run around one day screaming the deficits are horrible and then turn around the next day and say we need them; or at least you shouldn’t be able to do this and still expect to be taken seriously.
He didn’t use exactly those words, but that is one implication of his column on Paul Ryan’s decision to not support the Bowles-Simpson deficit plan when he was a member of the deficit commission back in 2010. (Brooks attributes Ryan’s action to his hope for a larger scale overhaul of Medicare. More cynical types might attribute it to his adherence to the Republican dogma of never supporting tax increases.)
Anyhow, fans of the Bowles-Simpson report might recall that it would have first put budget cuts in place in October of 2011. The projected deficit for fiscal year 2013 (Figure 2), which begins on October 1 of this year, is less than 4.0 percent of GDP. The people running around Washington worried about the end of the world fiscal cliff scenario are worried about tax increases and spending cuts that will shrink the deficit to 4.0 percent of GDP as of January 1, 2013.
The timing of the tax increases and budget cuts in the Bowles-Simpson scenario is obviously somewhat different than the fiscal cliff story, and it does assume a stronger growth path than we have actually seen, but it is more than a bit bizarre to see many of the same people who have been screaming about the horror of large deficits now terrified by the horror of large deficit reduction.
Just to be clear, deficits are needed now. There is nothing other than the budget deficit to replace the private sector demand we lost when the housing bubble collapsed. But you don’t get to run around one day screaming the deficits are horrible and then turn around the next day and say we need them; or at least you shouldn’t be able to do this and still expect to be taken seriously.
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The context is efforts to limit the consumption of sugary soft drinks, which Will assures us will not work and are a waste of government money. Will is appalled that the Centers for Disease Control gave a $3 million grant to the State of Rhode Island to study how procurement strategies in schools and other public institutions can be altered to reduce the consumption of sugary soft drinks.
It would be difficult to determine whether this $3 million grant (approximately 0.00008 percent of federal spending) was well used. However the Center for Disease Control reports that more than one-third of adults are obese, which adds $147 billion a year to national health care costs each year (@ 50,000 times the size of the grant).
While Will is confident that the government cannot do anything to reduce consumption of sugary drinks, it is worth noting that self-reported smoking rates fell from over 40 percent in the 70s to just over 20 percent today. It may not be easy to design a strategy that will be as effective in reducing the consumption of sugary drinks, but given the enormous financial costs and health costs associated with obesity, it is not obviously foolish to use a small portion of the federal budget to experiment with various alternatives.
Does Will think the country would be better off with no cigarette taxes or anti-smoking campaigns, even if it meant that 40 percent of adults were still smoking?
The context is efforts to limit the consumption of sugary soft drinks, which Will assures us will not work and are a waste of government money. Will is appalled that the Centers for Disease Control gave a $3 million grant to the State of Rhode Island to study how procurement strategies in schools and other public institutions can be altered to reduce the consumption of sugary soft drinks.
It would be difficult to determine whether this $3 million grant (approximately 0.00008 percent of federal spending) was well used. However the Center for Disease Control reports that more than one-third of adults are obese, which adds $147 billion a year to national health care costs each year (@ 50,000 times the size of the grant).
While Will is confident that the government cannot do anything to reduce consumption of sugary drinks, it is worth noting that self-reported smoking rates fell from over 40 percent in the 70s to just over 20 percent today. It may not be easy to design a strategy that will be as effective in reducing the consumption of sugary drinks, but given the enormous financial costs and health costs associated with obesity, it is not obviously foolish to use a small portion of the federal budget to experiment with various alternatives.
Does Will think the country would be better off with no cigarette taxes or anti-smoking campaigns, even if it meant that 40 percent of adults were still smoking?
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The NYT had an article that was far more hesitant about the housing recovery than is warranted by the data. In fact, house prices have pretty much stabilized at a normal level, as have existing home sales.
The problem is that the NYT still does not seem to understand that we had a housing bubble, at one point warning readers that:
“She [Michelle Meyer, an economist with Bank of America Merrill Lynch] expected home prices to rise 2 percent annually in 2012 and 2013, with momentum gradually increasing later in the decade. At that rate, the average home price would regain its 2006 peak in 2022.”
Of course there is no more reason to expect house prices to return to their bubble inflated peaks than there is to expect the NASDAQ to rise back to the 5000 level it reached at the peak of the stock bubble. Eventually inflation will cause both markets to pass these peaks, but as the article notes, this will be a long time.
The current level of existing home sales, just under 4.5 million, is very much in keeping with the longer term trend. In the years 1993-1995, before the bubble began to inflate the market, existing homes sales averaged less than 3.5 million.
The piece includes a chart showing building permits that is clearly wrong. The chart shows building permits peaking at well over 2 million a year in the mid-90s and then plunging in the last decade. In fact permits were under 1.5 million annually in the mid-90s. The chart may have been off by a decade.
The piece also includes a reference to the recent rise in prices in Phoenix. It is worth noting that is largely driven by an extraordinary run up in prices in the bottom tier of the market. Prices in this segment of the market have risen at a 47.3 percent annual rate in the last three months. This looks like a speculative bubble.
The NYT had an article that was far more hesitant about the housing recovery than is warranted by the data. In fact, house prices have pretty much stabilized at a normal level, as have existing home sales.
The problem is that the NYT still does not seem to understand that we had a housing bubble, at one point warning readers that:
“She [Michelle Meyer, an economist with Bank of America Merrill Lynch] expected home prices to rise 2 percent annually in 2012 and 2013, with momentum gradually increasing later in the decade. At that rate, the average home price would regain its 2006 peak in 2022.”
Of course there is no more reason to expect house prices to return to their bubble inflated peaks than there is to expect the NASDAQ to rise back to the 5000 level it reached at the peak of the stock bubble. Eventually inflation will cause both markets to pass these peaks, but as the article notes, this will be a long time.
The current level of existing home sales, just under 4.5 million, is very much in keeping with the longer term trend. In the years 1993-1995, before the bubble began to inflate the market, existing homes sales averaged less than 3.5 million.
The piece includes a chart showing building permits that is clearly wrong. The chart shows building permits peaking at well over 2 million a year in the mid-90s and then plunging in the last decade. In fact permits were under 1.5 million annually in the mid-90s. The chart may have been off by a decade.
The piece also includes a reference to the recent rise in prices in Phoenix. It is worth noting that is largely driven by an extraordinary run up in prices in the bottom tier of the market. Prices in this segment of the market have risen at a 47.3 percent annual rate in the last three months. This looks like a speculative bubble.
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