By May 2017, Venezuela’s minimum monthly wage wasn’t enough to meet even 12 percent of a single person’s basic food needs. A survey of 6,500 households by three prestigious universities showed that 74 percent of the population had lost on average nineteen pounds in 2016. Infant mortality in hospitals has risen by 100 percent. Diseases nearly eradicated in many countries, like malaria and diphtheria, have flourished; illnesses largely new to the area, like Chikungunya, Zika, and dengue, have spread. Caracas is now the most dangerous city on the planet. All this is happening in a country that has one of the largest oil reserves in the world.
You can read more at the NYROB here.
In May 2016, The Urban Institute, not known as being a bastion of free market thought, released their best cost estimates for Bernie style “Medicare for all.”
Below is the executive summary (minus a overview of their methods). You can read the report in its entirety here.
The Sanders Single-Payer Health Care Plan
Presidential candidate Senator Bernie Sanders has called for adopting a single-payer health care system in the United States.1 He proposes replacing the programs established under the Affordable Care Act (ACA), as well as preexisting public programs such as Medicaid and Medicare, with the new system. Under his approach, all individuals in the United States would be covered by a single insurance program. Sanders’s plan would eliminate all private spending and replace all private and public coverage programs, except Veterans Health Insurance and the Indian Health Service. Benefits provided under the insurance plan would cover all medically necessary services, and cost sharing would be eliminated entirely. Coverage would include both acute and long-term care.
Our central findings of the effects of the Sanders approach are shown in table 1 and include the following:
- All American residents would be automatically enrolled in acute care coverage, increasing insurance coverage by an estimated 28.3 million people in 2017, from an uninsurance rate for nonelderly adults of 10.4 percent under current law in 2017. In 2026, the Sanders plan would decrease the number of nonelderly uninsured by 30.9 million, or 11.0 percent of the population, relative to current law. (The uninsurance rate under current law in 2026 is projected to be larger than the rate in 2017 as a result of demographic changes and a slight decrease in the rate of employer-sponsored insurance.) Although the intent is unspecified in the campaign’s materials, this finding assumes that the plan would cover the undocumented population as well as citizens and other legal residents.
- National health expenditures for acute care for the nonelderly would increase by $412.0 billion (22.9 percent) in 2017. Aggregate spending on acute care services for those otherwise enrolled in Medicare would increase by $38.5 billion (3.8 percent) in 2017. Long-term service and support expenditures would increase by $68.4 billion (28.6 percent) in 2017.
- Together, national health expenditures would increase by a total of $518.9 billion (16.9 percent) in 2017, and by 6.6 trillion (16.6 percent) between 2017 and 2026.
- The increase in federal expenditures would be considerably larger than the increase in national health expenditures because substantial spending borne by states, employers, and households under current law would shift to the federal government under the Sanders plan. Federal expenditures in 2017 would increase by $1.9 trillion for acute care for the nonelderly, by $465.9 billion for those otherwise enrolled in Medicare, and by $212.1 billion for long-term services and supports.
- In total, federal spending would increase by about $2.5 trillion (257.6 percent) in 2017. Federal expenditures would increase by about $32.0 trillion (232.7 percent) between 2017 and 2026. The increase in federal spending is so large because the federal government would absorb a substantial amount of current spending by state and local governments, employers, and households. In addition, federal spending would be needed for newly covered individuals, expanded benefits and the elimination of cost sharing for those insured under current law, and the new long-term support and services program.
- State and local governments could save $319.8 billion in 2017 and $4.1 trillion between 2017 and 2026 as the federal government absorbs these costs under the Sanders plan (not shown in table 1). A maintenance-of-effort requirement could make state and local funds available to help pay for the plan, but the legality of such a requirement is in question.
- Private health care spending by households and employers would drop as the federal government would absorb their spending under current law. Private sector expenditures for these groups would decrease by $1.7 trillion in 2017 and by $21.9 trillion between 2017 and 2026. These considerable savings would partially offset the impact on the private sector of new taxes required to pay for the Sanders plan.
- Analysis by the Tax Policy Center indicates that Sanders’s revenue proposals, intended to finance all new health and nonhealth spending, would raise $15.3 trillion in revenue over 2017 to 2026. This amount is approximately $16.6 trillion less than the increased federal cost of his health care plan estimated here. The discrepancy suggests that to fully finance the Sanders approach, additional sources of revenue would have to be identified; that is, the proposed taxes are much too low to fully finance the plan.
Here is a conclusion of a 2012 CRS report titled “Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945 (Updated)”
It is reasonable to assume that a tax rate change limited to a small group of taxpayers at the top of the income distribution would have a negligible effect on economic growth.
The report isn’t conclusive as the report looks at their association and not causation, but the report reinforces (to me anyways) that the Republicans need a broader solution to 1) achieving economic growth and 2) producing growth that is more inclusive. There are all sorts of ways to evaluate economic policy including GDP growth and its allocation, labor participation, unemployment, etc.. Economic growth seems to be the only metric Republicans talk or care about and even if we can growth the economy, we still need to make sure it “works for everyone.”
You can read the rest here.
The $54 billion defense spending increase the White House has proposed is a sign that President Trump intends to keep his promise to rebuild the military. Yet simply increasing the defense budget will not be enough. The president must fundamentally reshape the way Washington approaches defense spending if he hopes to be successful.
Our defense budget is a sieve for congressional pet projects, special interest contracts, and social engineering programs. Pumping more fuel into the tank is little use if you don’t patch the holes in the bottom first.
There is more than enough money already allocated to make American “safer.” The US military, just like any large institution, is grossly inefficient and rent seeking is rampant.
You can read the rest here. The author is James Hasson.
Alas, benefits have not measured up to people’s unrealistic expectations. The scheme’s founders told workers that if they contributed continuously throughout their careers they would receive a generous 70% of their final salaries upon retirement. And indeed, men who chipped in for 30 years or more earned an average pension of 77% of their final salary. But most workers contributed far less. Women took time off to raise children (and retire earlier than men). Many Chileans spent time in informal jobs or unemployed. On average, they contribute for only 40% of their prime working years.
For most people the 10% contribution rate, just half the average in the OECD, a club of mainly rich countries, is too low. As a result, the typical benefit, including a supplement paid to poor people, is 45% of a pensioner’s final salary, well below the OECD average of 61%. Women are worst off. They take home pensions worth 31% of their final salaries, compared with 60% for men. In 2008 the government decided to reward mothers for each child they raised by topping up their pensions, but that does not fully compensate for the shortfall.
You can read more at the Economist here.