Posts Tagged ‘Martin Feldstein’

Member Of Obama’s Economic Recovery Advisory Board Attacks ObamaCare

January 4, 2010

Harvard University professor Martin Feldstein, adviser to both Republican and Democrat administrations, and currently serving as a member of Obama’s President’s Economic Recovery Advisory Board, has come out strongly against ObamaCare.

Unfortunately, Feldstein failed to see the folly of Obama’s stimulus porkulus.  Perhaps because of his “fool me once, shame on you; fool me twice, shame on me” realization, he is now dead set against Obama’s healthcare porkulus.

Feldstein once served as an adviser to Ronald Reagan.  Perhaps he finally thought about what Ronald Reagan said about the liberals attempt to seize health care and socialism.

From a speech Reagan gave:

One of the traditional methods of imposing statism or socialism on a people has been by way of medicine. It’s very easy to disguise a medical program as a humanitarian project. Most people are a little reluctant to oppose anything that suggests medical care for people who possibly can’t afford it.

Now, the American people, if you put it to them about socialized medicine and gave them a chance to choose, would unhesitatingly vote against it. We had an example of this. Under the Truman administration it was proposed that we have a compulsory health insurance program for all people in the United States, and, of course, the American people unhesitatingly rejected this.

And sure enough, and as Reagan predicted so many years ago, the American people – measured by every single poll across the board – have firmly rejected ObamaCare.

Kevin Price has written an article detailing Feldstein’s objections:

In a recent article in the Wall Street Journal (aptly titled “ObamaCare’s Crippling Deficits”), Feldstein states that “the higher taxes, debt payments and interest rates needed to pay for health reform mean lower living standards.”Feldstein has been an advisor to both Republicans and Democrats, but is known as a proponent of huge “stimulus packages” during economic decline. In spite of this, Obama probably did not make a particularly smart choice in picking the fiercely independent Feldstein. The one time advisor to Ronald Reagan publicly warned that president of the negative implications of the deficits in the 1980s. Those deficits were nothing compared to those provided in Obama’s budget. His deficits would last years after the recession is over and in spite of the massive tax increases that promise to accompany them. The Democrats correctly criticized Bush’s deficits. Feldstein notes that Obama’s deficits, because of its expensive health care agenda will reach $9.3 trillion — more than twice the amount of the previous administration.

In an earlier article in the Washington Post, Feldstein noted that “For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement.” Feldstein also notes that the price of the program is enormous and would cost more than $1 trillion and would raise the current maximum tax rate from 35 to 45 percent.

Barack Obama has fundamentally been dishonest when it comes to the health care debate. Consistently he has been arguing that his agenda would lower cost and expand coverage. The reality is, his agenda would dramatically reduce the quality of coverage for those who currently enjoy the best health care system in the world and would be accompanied by the excessive costs so common in bureaucratically driven programs.

I thought it would be a good thing to acquaint people as to what a member of Obama’s President’s Economic Recovery Advisory Board – who initially supported Obama’s ideas – has to say about Obama’s approach to health care.

I find this particularly interesting in light of Obama’s vile demagoguery against those who protest his plan.  If you oppose his takeover, you are an ideological slave to the GOP, or a minion of the private health insurance companies.  And yet here is a man whom Obama personally selected to be an adviser, presumably for his wisdom, saying that ObamaCare will be an unmitigated disaster.

From The Wall Street Journal:

ObamaCare’s Crippling Deficits
The higher taxes, debt payments and interest rates needed to pay for health reform mean lower living standards.

By MARTIN FELDSTEIN

While the deficits caused by the fiscal stimulus package will end in 2011 and will help to sustain a fragile recovery in 2010, the deficits projected for the longer term are a threat to our economic future. The starting point for controlling those future deficits is for Congress to abandon the administration’s health-care plan—a plan that will cost more than $1 trillion.

The deficits projected for the next decade and beyond are unprecedented. According to an assessment released in March by the Congressional Budget Office (CBO), the president’s budget implies that deficits will average 5.2% of GDP over the next decade and will be 5.5% of GDP in 2019. Without the president’s proposals, the budget office forecasts a 2019 deficit of only 2% of GDP.

The CBO’s deficit projections are based on the optimistic assumptions that the economy will grow at a healthy 3% pace with no recessions during the next decade; that there will be no new spending programs after this year’s budget; and that the rising national debt will increase the rate of interest on government bonds by less than 1%. More realistic assumptions would imply a 2019 deficit of more than 8% of GDP and a government debt of more than 100% of GDP.

Such enormous deficits would crowd out productivity-enhancing investments in new equipment and software as the government borrows funds otherwise available to private investors. The result would be slower economic growth and a lower standard of living.

In the nearer term, the projected deficits could cause interest rates on bonds and mortgages to rise sharply if bond investors fear that the government will not prevent inflation. This is a greater risk now that more than half of the U.S. government debt is held by the Chinese and other foreign investors. Such an interest rate rise could kill a recovery in 2010 or 2011 and depress growth in the years that follow.

Dropping the Obama health plan would significantly reduce fiscal deficits over the next decade and help restore public confidence in the ability of Congress to control spending. The CBO estimates that the House committee versions of the Obama health plan would add more than $1 trillion to federal deficits over the next decade. But the actual costs would be much higher.

For starters, $1 trillion of extra debt-financed spending would cause the government to pay about $300 billion of extra interest in the next decade. Moreover, the CBO’s method of estimating the cost of such a program doesn’t recognize the incentives it creates for households and firms to change their behavior.

The House health-care bill gives a large subsidy to millions of families with incomes up to three times the poverty level (i.e., up to $66,000 now for a family of four) if they buy their insurance through one of the newly created “insurance exchanges,” but not if they get their insurance from their employer. The CBO’s cost estimate understates the number who would receive the subsidy because it ignores the incentive for many firms to drop employer-provided coverage. It also ignores the strong incentive that individuals would have to reduce reportable cash incomes to qualify for higher subsidy rates. The total cost of ObamaCare over the next decade likely would be closer to $2 trillion than to $1 trillion.

The administration’s claim that the health-care plan would be “self-financing” is both false and irrelevant. It is false because it would only be self-financing if one counts a variety of President Obama’s proposed tax increases—and even those would produce much less revenue than is assumed in the budget calculations. The claim is irrelevant because those tax increases have nothing to do with health care and could be used instead to reduce other projected deficits.

For example, the administration and the congressional designers of ObamaCare say they would finance a substantial part of health reform with the revenue from new taxes on corporate foreign profits and on high-income individuals. The likely revenue from these tax changes would be much less than the official estimates because of the induced changes in taxpayer behavior that the estimators ignore.

Previous experience with changes in the marginal tax rates of high-income individuals implies that the current proposal to raise the marginal tax rate to about 50% from today’s 40% would produce only about half of the official revenue estimates. No one knows how much of the estimated extra tax revenue on foreign profits would be lost as the resulting fall in international competitiveness reduces profits, and as businesses sell their overseas subsidiaries or shift their profits in other ways.

While abandoning health reform would be an important step, it would not be enough to limit the exploding level of future deficits and debt. That requires substantial reductions in existing spending programs, if large tax increases are to be avoided. Since Medicare is the largest contributor to the explosive growth in government spending, a good way to start shrinking government outlays would be by restructuring Medicare to shift more of its costs to supplementary private insurance, perhaps on an income-related basis.

Given the perceived need for significant additional tax revenue to shrink future fiscal deficits, there is now talk in Washington of introducing a value-added tax (VAT), the kind of national sales tax that European governments use to finance their welfare states. That would be a triply bad idea. Although it is a tax on spending, a VAT effectively raises marginal tax rates. Like the income tax, it reduces the reward for work and entrepreneurship by adding a tax to the prices of all goods and services. A VAT would also be grossly unfair to those whose lifetime savings would now be subject to a new tax when they start to spend those savings.

A VAT would open the door to an explosion of new spending programs. That’s because, no matter how low the initial rate, the tax rate would be drawn inevitably to European rates of more than 15%—on top of existing income and payroll taxes.

The key to raising revenue without raising marginal tax rates or creating a new tax is to reduce or eliminate some of the “tax expenditures” that now lower tax revenue by special deductions and exclusions. Ending the current exclusion from taxable income of employer payments for health insurance would increase income tax revenue by more than $1 trillion over the next five years and nearly $3 trillion over the next decade. Eliminating this subsidy would also lead to a restructuring of private health insurance that would give patients the incentive to seek more cost-effective care and thereby bring down the overall cost of health care.

Restructuring Medicare and reforming tax rules would be politically difficult. But a failure by Congress to address the exploding path of fiscal deficits would be morally irresponsible.

Mr. Feldstein, chairman of the Council of Economic Advisers under President Ronald Reagan, is a professor at Harvard and a member of The Wall Street Journal’s board of contributors.

From the Washington Post:

Obama’s Plan Isn’t the Answer
By Martin Feldstein

For the 85 percent of Americans who already have health insurance, the Obama health plan is bad news. It means higher taxes, less health care and no protection if they lose their current insurance because of unemployment or early retirement.

President Obama’s primary goal is to extend formal health insurance to those low-income individuals who are currently uninsured despite the nearly $300-billion-a-year Medicaid program. Doing so the Obama way would cost more than $1 trillion over the next 10 years. There surely must be better and less costly ways to improve the health and health care of that low-income group.

Although the president claims he can finance the enormous increase in costs by raising taxes only on high-income individuals, tax experts know that this won’t work. Experience shows that raising the top income-tax rate from 35 percent today to more than 45 percent — the effect of adding the proposed health surcharge to the increase resulting from letting the Bush tax cuts expire for high-income taxpayers — would change the behavior of high-income individuals in ways that would shrink their taxable incomes and therefore produce less revenue. The result would be larger deficits and higher taxes on the middle class. Because of the unprecedented deficits forecast for the next decade, this is definitely not a time to start a major new spending program.

A second key goal of the Obama health plan is to slow the growth of health-care spending. The president’s budget calls explicitly for cutting Medicare to help pay for the expanded benefits for low-income individuals. But the administration’s goal is bigger than that. It is to cut dramatically the amount of health care that we all consume.

A recent report by the White House Council of Economic Advisers claims that the government can cut the projected level of health spending by 15 percent over the next decade and by 30 percent over the next 20 years. Although the reduced spending would result from fewer services rather than lower payments to providers, we are told that this can be done without lowering the quality of care or diminishing our health. I don’t believe it.

To support their claim that costs can be radically reduced without adverse effects, the health planners point to the fact that about half of all hospital costs are for patients in the last year of life. I don’t find that persuasive. Do doctors really know which of their very ill patients will benefit from expensive care and which will die regardless of the care they receive? In a world of uncertainty, many of us will want to hope that care will help.

We are also often told that patients in Minnesota receive many fewer dollars of care per capita than patients in New York and California without adverse health effects. When I hear that, I wonder whether we should cut back on care, as these experts advocate, move to Minnesota, or wish we had the genetic stock of Minnesotans.

The administration’s health planners believe that the new “cost effectiveness research” will allow officials to eliminate wasteful spending by defining the “appropriate” care that will be paid for by the government and by private insurance. Such a constrained, one-size-fits-all form of medicine may be necessary in some European health programs in which the government pays all the bills. But Americans have shown that we prefer to retain a diversity of options and the ability to choose among doctors, hospitals and standards of care.

At a time when medical science offers the hope of major improvements in the treatment of a wide range of dread diseases, should Washington be limiting the available care and, in the process, discouraging medical researchers from developing new procedures and products? Although health care is much more expensive than it was 30 years ago, who today would settle for the health care of the 1970s?

Obama has said that he would favor a British-style “single payer” system in which the government owns the hospitals and the doctors are salaried but that he recognizes that such a shift would be too disruptive to the health-care industry. The Obama plan to have a government insurance provider that can undercut the premiums charged by private insurers would undoubtedly speed the arrival of such a single-payer plan. It is hard to think of any other reason for the administration to want a government insurer when there is already a very competitive private insurance market that could be made more so by removing government restrictions on interstate competition.

There is much that can be done to improve our health-care system, but the Obama plan is not the way to do it. One helpful change that could be made right away is fixing the COBRA system so that middle-income households that lose their insurance because of early retirement or a permanent layoff are not deterred by the cost of continuing their previous coverage.

Now that congressional leaders have made it clear that Obama will not see health legislation until at least the end of the year, the president should look beyond health policy and turn his attention to the problems that are impeding our economic recovery.

Martin Feldstein, a professor of economics at Harvard University and president emeritus of the nonprofit National Bureau of Economic Research, was chairman of the Council of Economic Advisers from 1982 to 1984.

George Will pointed out something interesting on ABC’s This Week yesterday:

WILL: When this campaign started a year ago, 87 percent of the American people had some form of health insurance. If this is signed into law, 94 percent will. So a 7 percent increase is what this war is about. And we read this morning in the paper that, in 2018, there will still be 23 million uninsured people.

So this massive takeover is all being done under the guise of providing coverage to a mere 7% of Americans.  We’re literally going to drive the entire health care system right off a cliff to “improve” health care for a tiny minority of people.

Reagan was right, even speaking to us from the grave, that Americans would reject medical socialism.  And Martin Feldstein – who wrongly joined Obama in supporting the stimulus (possibly because he failed to realize just how incompetent and corrupt and unforgivably partisan the Democrats would be with the stimulus) – is right about the unacceptable costs ObamaCare will ultimately impose on an already debt-ridden government.

Advertisements

Meet Thomas Schelling, Nobel Prize Winner and Global Warming Demagogue

July 25, 2009

We can go back and look at Al Gore, a documented fraud, a presenter of entirely false scientific claims, and the winner of a Nobel Prize for science.  A British High Court judge found nine “glaring” scientific errors in the Inconvenient Truth “documentary” that garnered Gore his scientific credibility.  But the only “inconvenient truth” was that the film was an example of “alarmism” and “exaggeration” and was not fit for viewing by British school children.

“Science” has officially and for the record made itself a propaganda tool to advance radical redistributionist social policies.

And now we have another Nobel prize winner doing the same thing to his own field of economics.

An Interview With Thomas Schelling, Part Two

CLARKE: I wanted to go back to the international climate-change negotiation process. So assuming we had a perfect U.S. bill — written by you or by 15 experts working on this full time — how would the international negotiation process work? It’s not obvious that averting global climate change is in the rational self-interest of anyone that is alive today. The serious consequences probably won’t occur until 2080 or 2100 or thereafter. That’s one problem. Another problem is that those consequences are going to be distributed in a radically uneven way. The northwest of the United States might actually benefit. So how does a negotiation process work? How does a generation today negotiate on behalf of future generations? And how do we negotiate when the costs are distributed so unevenly?

SCHELLING: Well I do think that one of the difficulties is that most of the beneficiaries aren’t yet born. More than that: Most of the beneficiaries will be born in what we now call the developing world. By 2080 or 2100 five-sixths of the population, at least, will be in places like China, India, Indonesia, Africa and so forth. And what I don’t know is whether Americans are really willing to understand that and do anything for the benefit of the unborn Chinese.

SCHELLING: It’s a tough sell. And probably you have to find ways to exaggerate the threat. And you can in fact find ways to make the threat serious. I think there’s a significant likelihood of a kind of a runaway release of carbon and methane from permafrost, and from huge offshore deposits of methane all around the world. If you begin to get methane leaking on a large scale — even though methane doesn’t stay in the atmosphere very long — it might warm things up fast enough that it will induce further methane release, which will warm things up more, which will release more. And that will create a huge multiplier effect, and it could become very serious.

CLARKE: And you mean serious for everyone, including the United States?

SCHELLING: Yes, for almost anybody.

CLARKE: And when you say, “exaggerate the costs” do you mean, American politicians should exaggerate the costs to the American public, to get American support for a bill that will overwhelmingly benefit the developing world?

SCHELLING: [Laughs] It’s very hard to get honest people.

SCHELLING: Well, part of me sympathizes with the case for disingenuousness! I mean, it seems to me that there is a strong moral case for helping unborn Bangladeshi citizens. But I don’t know how you sell that. It’s not in anyone’s rational interest, at least in the US, to legislate on that basis.

Well, let me at least agree with Thomas Schelling to this extent: yes, it is indeed hard to find honest people.  Especially from our “experts” whom we count upon to inform us of the facts, rather than leading us by the hand to conclusions based on false premises becauses they are arrogant elitists who think only they are smart enough to handle the truth.

The article goes on – read it here – with a seriously leftist-tilted back-and-forth about climate change and the degree to which America is morally obligated to commit economic hari kari in order to atone for its sins to the developing world.

Then we get to the moral nitty gritty to end the article:

CLARKE: I wanted to ask one more question, to go back to the moral issue here. It does seem to me that the strongest case for mitigating the effects of global climate change is a moral one. It is based not on our own interest but on the interests of people in the developing world who don’t yet exist. But it also seems to me that — while I don’t know much about game theory — collective bargaining theories generally assume the participants are rational and self-interested. So how does one go about making sense of an arrangement where we must set our self-interest aside? How does one make the moral case in a situation like this? Or is my description of collective bargaining just totally idiotic?

SCHELLING: Well, I think you have to realize that most people have very strong moral feelings. I think in a lot of cases they’re misdirected. I wish moral feelings about a two-month old fetus were attached to hungry children in Africa. But I think people have very strong moral feelings. In fact, I’m always amazed by the number of people who at least pretend they’re worried about the polar bears. […]

SCHELLING: And I think the churches don’t realize that they could have a potent effect in not letting so much of god’s legacy — in terms of flora and fauna — be destroyed by climate change.

SCHELLING: But I tend to be rather pessimistic. I sometimes wish that we could have, over the next five or ten years, a lot of horrid things happening — you know, like tornadoes in the Midwest and so forth — that would get people very concerned about climate change. But I don’t think that’s going to happen.

Now, Thomas Schelling one the one hand tells us that we should feel intensely morally obligated to “beneficiaries [who] not yet born” – as long as they’re not “a two month old fetus” who is presumably about to be aborted – in which case we apparently have absolutely no obligation at all.  But stop and think: the moral logic of abortion means the future generation doesn’t matter unless we subjectively want them to matter.  No one who advocates abortion has any right to lecture others that they should not only care about but sacrifice for “beneficiaries not yet born.” Then Schelling proceeds to presume from his own massive personal arrogance that the American people’s moral intuitions are faulty, but that his are functioning perfectly.  Which of course justifies him in lying to us to steer us toward the conclusion dictated by his own superior moral reasoning.

And then this man who presumes himself to be so morally superior to everyone “beneath” him, who is entitled to “exaggerate the threat” of global warming because Americans are not responsible to make sound moral decisions if they know the truth, says he hopes “horrid things” happen to we the poor, the huddling, the ignorant and unwashed masses.

This economist seems to live more by the law involving the telling of a lie often enough that it is believed far more than by the law of supply and demand.

It’s funny that Schelling mentions polar bears, as an admitted global warming exaggerator now proceeds to run into the pseudo-science of another global warming exaggerator.  And you have – unlike Al Gore or Thomas Schelling, who have credibility in the scientific community without having any ethical integrity – a genuine scientist being persecuted because he cares about the truth:

One of the world’s leading polar bear experts has been told to stay away from an international conference on the animals because his views are “extremely unhelpful,” according to an e-mail by the chairman of the Polar Bear Specialist Group, Dr. Andy Derocher.

The London Telegraph reports Canadian biologist Mitchell Taylor has more than 30 years of experience with polar bears. But his belief that global warming is caused by nature, not man, led officials to bar him from this week’s polar bear specialist group meeting in Denmark.

Taylor says the polar bear population has actually increased over the last 30 years. He says the threat to them by melting Arctic ice — illustrated by a famous photo taken by photographer Amanda Byrd — has become the most iconic cause for global warming theorists. The photo is often used by former Vice President Al Gore and others as an example of the dangers faced by the bears. But it was debunked last year by the photographer, who says the picture had nothing to do with global warming, and that the bears were not in danger. The photographer said she just happened to catch the bears on a small windswept iceberg.

And we have the same types of people as Thomas Schelling suppresing the conclusions of science that show the opposite of what they want science to show.  Consider the White House’s suppression of a scientific report by the EPA.

Or you can go back to the “hockey stick model” to see just how far “respected” scientists are willing to go in order to pass off a bogus theory for mass consumption — and just how willing other scientists are to unquestioningly accept whatever “evidence” supports their preconceived ideological notions.

Harvard economist Martin Feldstein apparently lacks Thomas Schelling’s godlike view, and thus doesn’t seem to think he possesses the divine right to distort the truth in order to lead Americans to the conclusions he ordains as “moral.”

Feldstein simply looks at the economics – which, who knows, may be a strange thing for an economist to do these days – and concludes:

Americans should ask themselves whether this annual tax of $1,600-plus per family is justified by the very small resulting decline in global CO2. Since the U.S. share of global CO2 production is now less than 25 percent (and is projected to decline as China and other developing nations grow), a 15 percent fall in U.S. CO2 output would lower global CO2 output by less than 4 percent. Its impact on global warming would be virtually unnoticeable. The U.S. should wait until there is a global agreement on CO2 that includes China and India before committing to costly reductions in the United States. […]

In my judgment, the proposed cap-and-trade system would be a costly policy that would penalize Americans with little effect on global warming. The proposal to give away most of the permits only makes a bad idea worse. Taxpayers and legislators should keep these things in mind before enacting any cap-and-trade system.

Aside from the fact that building scientific evidence indicates that global warming is a gigantic load of malarkey (just consider how the fact that the planet ISN’T warming has now led the alarmist movement to instead begin using the term “climate change”), global warming-turned climate change alarmists have an even bigger problem to worry about: the fact that the developing world has no interests in committing their own versions of hari kari for the sake of a theory.  China and India are poised to become “global warming polluters” on such a scale that any reductions in American and European greenhouse gasses would be utterly insignificant.  So why should we dramatically undermine our lives?

Chinese and Indians know what it’s like to live in a mud hut, which is the inevitable result of dramatically hamstringing our economic output to conform to the demands of the global warming alarmists.  The western radicals either don’t know what such deplorable conditions are like, or they believe that they – being the true arrogant elitists they are – will continue to live in their glass houses or ivory towers.