Elizabeth Warrens - Tax and Spend Plan for Medicare for all

[Horatio Parker]

So if there is nothing left to cut then the future generations will be asked to pay for it more directly with higher taxes ... or higher inflation, which is really just a regressive, stealth, wealth tax. Someone ALWAYS has to pay for a tax cut... just not the people who die before the repercussions kick in.

Tax cuts without spending cuts are not cuts at all, just the issuance of IOUs.

Not so. The limitation to spending is productivity - if the economy can't absorb the spending, inflation will follow.

The deficit itself is irrelevant - it's a mirror image of private sector surplus. Fear of deficits is a holdover from the gold standard when the money supply was limited by the supply of gold. With a fiat currency, the money supply can expand or contract at will. The deficit is just a residual indicating money created and not taxed back. Debt issuance is another legacy of the gold standard, only now it serves as welfare for the rich, and is used by the Fed to maintain its overnight rate.

 

[PyramidHead]

Honest question for everyone: why do you think this is the first we're hearing from Warren of this public option thing followed by a delayed switch to M4A after the midterms? In the first debate, she said "I'm with Bernie on M4A" or something, then went back and forth on whether private insurance companies would be kept under her plan. Now she's outright saying "every health insurance company will be covered", whatever that means, and giving them all the leeway they could want to frame the debate and ensure a single payer system never has a hope.

 

[Elixir]

Honest question for everyone: why do you think this is the first we're hearing from Warren of this public option thing followed by a delayed switch to M4A after the midterms?

Because polls said that is what Dem voters want, and she knew she'd have to pivot that way for the general in any event, or risk TrumpII.

 

[PyramidHead]

Honest question for everyone: why do you think this is the first we're hearing from Warren of this public option thing followed by a delayed switch to M4A after the midterms?

Because polls said that is what Dem voters want, and she knew she'd have to pivot that way for the general in any event, or risk TrumpII.

We have a winner. That is indeed what she believes. She's objectively wrong on both counts (what the voters want and what will lead to Trump II), but that's her M.O. to a tee: opportunistically say what will get votes according to polls, then abandon those aspirations upon taking power. She won't fight for this because she has no intention of doing it; it's just a stump speech, not a lifelong purpose.

 

[starwater]

Warren now has a back up and and interim plan. She knows that Medicare for all will never pass the Senate.

 

[Elixir]

Honest question for everyone: why do you think this is the first we're hearing from Warren of this public option thing followed by a delayed switch to M4A after the midterms?

Because polls said that is what Dem voters want, and she knew she'd have to pivot that way for the general in any event, or risk TrumpII.

We have a winner. That is indeed what she believes. She's objectively wrong on both counts (what the voters want and what will lead to Trump II), but that's her M.O. to a tee: opportunistically say what will get votes according to polls, then abandon those aspirations upon taking power. She won't fight for this because she has no intention of doing it; it's just a stump speech, not a lifelong purpose.

There's enough truth in that to reaffirm my preference for Bernie (I'm sure you'll be overjoyed at that! ). I'm still not planning to caucus for him, but I do think he is the most principle-driven candidate in the lot. Whether he'd be the most effective one... no telling.

 

[T.G.G. Moogly]

So if there is nothing left to cut then the future generations will be asked to pay for it more directly with higher taxes ... or higher inflation, which is really just a regressive, stealth, wealth tax. Someone ALWAYS has to pay for a tax cut... just not the people who die before the repercussions kick in.

Tax cuts without spending cuts are not cuts at all, just the issuance of IOUs.

Not so. The limitation to spending is productivity - if the economy can't absorb the spending, inflation will follow.

The deficit itself is irrelevant - it's a mirror image of private sector surplus. Fear of deficits is a holdover from the gold standard when the money supply was limited by the supply of gold. With a fiat currency, the money supply can expand or contract at will. The deficit is just a residual indicating money created and not taxed back. Debt issuance is another legacy of the gold standard, only now it serves as welfare for the rich, and is used by the Fed to maintain its overnight rate.

That honestly makes sense, that productivity is the deciding metric. But that borrowed money is still money spent that must be repaid, revenues must still be collected. So at some point down the road the tax cuts that were financed by borrowing are just deferred payments.

Is there a limit to annual deficit spending? Is it simply GDP?

 

[TV and credit cards]

We have a winner. That is indeed what she believes. She's objectively wrong on both counts (what the voters want and what will lead to Trump II), but that's her M.O. to a tee: opportunistically say what will get votes according to polls, then abandon those aspirations upon taking power. She won't fight for this because she has no intention of doing it; it's just a stump speech, not a lifelong purpose.

There's enough truth in that to reaffirm my preference for Bernie (I'm sure you'll be overjoyed at that! ). I'm still not planning to caucus for him, but I do think he is the most principle-driven candidate in the lot. Whether he'd be the most effective one... no telling.

https://www.kff.org/slideshow/publi...ns-and-expanding-access-to-medicare-coverage/

 

[Elixir]

We have a winner. That is indeed what she believes. She's objectively wrong on both counts (what the voters want and what will lead to Trump II), but that's her M.O. to a tee: opportunistically say what will get votes according to polls, then abandon those aspirations upon taking power. She won't fight for this because she has no intention of doing it; it's just a stump speech, not a lifelong purpose.

There's enough truth in that to reaffirm my preference for Bernie (I'm sure you'll be overjoyed at that! ). I'm still not planning to caucus for him, but I do think he is the most principle-driven candidate in the lot. Whether he'd be the most effective one... no telling.

https://www.kff.org/slideshow/publi...ns-and-expanding-access-to-medicare-coverage/

Thank you TV&CC. That article does speak to the varying popularity of M4A. In the end though, it's all about how it's sold.

I would have thought that FOX news would have had a hard time selling the idea that Putin and MBS are our friends, while every intelligence agency including the CIA, FBI, NSA etc., plus purple heart recipient war heroes with 30+ years of distinguished service, honored generals, admirals and respected career diplomats with decades of outstanding service are all the enemy. But here we are - not only has Faux Nooz sold that idea successfully, but their salesmanship has forced most if not all of the Republicans in Congress to become turncoats in order to ride Trump's turncoat-tails. (Or maybe he has promised each of them that when he becomes King they can be Princes?)

So if Bernie can sell the idea that free everything for everyone is not only desirable but do-able at no cost - more power to him. All he needs is a major network to carry the water for him. The ironic thing is that compared to the ultimate cost of just 4 years of Trump idiocy, free medical care, free college etc. are probably less expensive - even in the short run.

But Bernie looks like a long shot right now, and I have little faith in his ability to sell amid Trump's noise. So I'm putting my faith in the Simpsons:

 

[SimpleDon]

This past weekend, Warren has revealed that she won't push for Medicare for All as a policy priority until her third year in office, after the midterms. Before then, it will just be a 'public option' a la ACA, which is of course doomed to fail and is a giant handout to insurance companies because it lets them offload all of their riskier clients (who are disproportionately poor and will thus go to the public option).

Warren has basically no interest in health care and is just trying to get people off her back until she wins the election, at which point she'll throw her hands up, say she tried the best possible plan and it failed, and the fight for single-payer will be lost for another generation.

And how are they supposed to push them onto the public option??

The public option will be less expensive than health care insurance from private insurers. The private insurers know this, which is why they went along with the ACA as long as the public option was excluded (and they got 32 billion dollars of government subsidies.)

 

[Horatio Parker]

Not so. The limitation to spending is productivity - if the economy can't absorb the spending, inflation will follow.

The deficit itself is irrelevant - it's a mirror image of private sector surplus. Fear of deficits is a holdover from the gold standard when the money supply was limited by the supply of gold. With a fiat currency, the money supply can expand or contract at will. The deficit is just a residual indicating money created and not taxed back. Debt issuance is another legacy of the gold standard, only now it serves as welfare for the rich, and is used by the Fed to maintain its overnight rate.

That honestly makes sense, that productivity is the deciding metric. But that borrowed money is still money spent that must be repaid, revenues must still be collected. So at some point down the road the tax cuts that were financed by borrowing are just deferred payments.

Is there a limit to annual deficit spending? Is it simply GDP?

It doesn't have to be repaid, not in the traditional sense. Sovreign currencies have their own rules. The debt issuance exactly matches the amount of deficit spending. It's simply a swap of non-interest bearing cash for interest bearing govt bonds. It's a holdover from the gold standard, when the money supply was determined by the amount of held commodity(gold). Now, besides being a source of corporate welfare, debt issuance is used to maintain the Feds overnight rate.

There s no inherent reason to issue debt along with deficit spending, except that we've always done it that way. Google "debt free money", there are many who believe debt issuance to be wrong. For one, govt bond trading doesnt do anything useful, there's nothing productive about it. Some have suggested limiting debt issuance to three month bonds, which are just about the same as cash.

The limit to deficit spending is the supply of things available to buy.

 

[SimpleDon]

This past weekend, Warren has revealed that she won't push for Medicare for All as a policy priority until her third year in office, after the midterms. Before then, it will just be a 'public option' a la ACA, which is of course doomed to fail and is a giant handout to insurance companies because it lets them offload all of their riskier clients (who are disproportionately poor and will thus go to the public option).

Warren has basically no interest in health care and is just trying to get people off her back until she wins the election, at which point she'll throw her hands up, say she tried the best possible plan and it failed, and the fight for single payer will be lost for another generation.

And how are they supposed to push them onto the public option??

By raising rates to the point of pricing them out. Insurance companies make money by providing insurance to people who will use it the least because they don't need it. Otherwise, they have to pay for things like surgery and other expensive procedures, and they don't want to do that. They would like nothing more than to filter out clients whose membership is both shaky from a profit standpoint (because of their low income and uncertain employment status) and risky from a payout standpoint (because they are more likely to need expensive procedures since they have fewer regular exams, worse nutrition, more stress, and more exposure to violence and other forms of injury compared to wealthier people). This has been their project from the get-go, of course, but installing a state-consecrated mechanism to make their refusal of such clients more justifiable is a huge marketing giveaway.

This is not completely true. The insurance companies don't mind raising medical costs because these rising costs provide the only certain way to rising profits for the insurance companies. The insurance companies set their premiums based on a "loss ratio," which, in practice, is how much they increase the medical costs to account for their costs of selling the insurance, their costs of administering the medical payments and their profits. The maximum loss ratio permitted under the ACA is 80%. This means that when you pay your premium, 80% goes to pay for the actual medical costs and 20% goes to the insurance company. To look at this as most businesses do it means that the health care insurance companies markup their costs by 25% to cover their costs and to provide their profits.

This means that the only sure way for them to increase their profits is for the medical costs to increase year to year. And they control how much they pay for the medical costs because of the fact that hospitals and the health care providers submit widely inflated bills to make sure that they receive all of the money that the insurance companies are willing to pay. The insurance companies assume that medical costs will go up by 10% next year and they set their premiums to reflect this rate of increase then they have the control over how much the medical costs increase, by 10% because they can increase the payments to the providers by that amount. And their profits increase by 10% too.

Under Warren's plan, the number of low-income people who are priced out of their insurance coverage will increase, and they will head to the public option in larger numbers than it will ever be prepared to accommodate. In a couple of years, it will be a blemish, another underfunded welfare system that proves the government can't do anything right, and then there will be no more wind left in the sails for single-payer. I know you don't care about that, but it's as good an illustration as any why Warren cannot be the choice for progressives who care about M4A. At this point, her plan is essentially no different from Biden's or Buttigeig's.

The government already pays for more than 50% of the medical costs in the country, between Medicare, Medicaid, TriCare (military, their dependents, and veterans), and its civilian employees and their dependents. I seriously doubt that M4A would overload the government in the way that you believe. The biggest problem that M4A would produce is all of the numbers of the bloated private insurance companies employees that it would put out of jobs. And don't forget the large numbers of health care providers' employees who currently confirm coverage and chase payments from that the many different insurance companies with many different policies who would no longer have jobs because of the uniform coverage and payment policies of M4A.

 

[SimpleDon]

Debt will eventually need to be paid. Borrowing from future generations to give out extra wads of cash to old folks today is taking money from those future generations. What is there not to understand? Future generations will be forced to pay this debt, perhaps through some austerity by cutting back on benefits and infrastructure that present humans are enjoying right now.

The trouble is, the US budget is soon to be able 80% Medicare, Social Security, Medicaid, interest and the military. The military definitely provides avenues for some cost reductions, but the remaining slice of the pie for discretionary spending in the US is getting smaller and smaller, meaning most cuts there will not affect the bottom line.

So if there is nothing left to cut then the future generations will be asked to pay for it more directly with higher taxes ... or higher inflation, which is really just a regressive, stealth, wealth tax. Someone ALWAYS has to pay for a tax cut... just not the people who die before the repercussions kick in.

This has never been true. In fact, if we tried to pay off the national debt it would produce a recession, as it has every time that it has been tried. The debt could only be paid off by reducing the amount of savings in the economy, the amount of money circulating in the economy.

The federal government budget deficit creates money and puts it into the economy. Running a surplus to pay off the national debt takes money out of the economy. Too large of a budget deficit produces inflation. Too small of a budget deficit or a budget surplus produces the opposite of inflation, deflation. Deflation has to be avoided at all costs in the real economy.

This fact is just one of the many facts that are ignored in Econ 101, neoliberal and neoclassical economics that produced the so-called "Washington Consensus," on the debt and the economy in general. It is the difference between seeing how the economy really is and the fantasy of how many wish that it would operate, the Austrian/Libertarian free-market economy that doesn't need a government to regulate it.

 

[Horatio Parker]

So if there is nothing left to cut then the future generations will be asked to pay for it more directly with higher taxes ... or higher inflation, which is really just a regressive, stealth, wealth tax. Someone ALWAYS has to pay for a tax cut... just not the people who die before the repercussions kick in.

This has never been true. In fact, if we tried to pay off the national debt it would produce a recession, as it has every time that it has been tried. The debt could only be paid off by reducing the amount of savings in the economy, the amount of money circulating in the economy.

The federal government budget deficit creates money and puts it into the economy. Running a surplus to pay off the national debt takes money out of the economy. Too large of a budget deficit produces inflation. Too small of a budget deficit or a budget surplus produces the opposite of inflation, deflation. Deflation has to be avoided at all costs in the real economy.

This fact is just one of the many facts that are ignored in Econ 101, neoliberal and neoclassical economics that produced the so-called "Washington Consensus," on the debt and the economy in general. It is the difference between seeing how the economy really is and the fantasy of how many wish that it would operate, the Austrian/Libertarian free-market economy that doesn't need a government to regulate it.

All true, with the addition that this is the case when there is a foreign sector deficit. When trade is in surplus, govt expenditure can be balanced, or in surplus. Because in the case of a trade surplus, the private sector surplus, or savings, is coming from overseas.

So some countries would rather have money than stuff(money which enables them to buy other stuff from foreigners), others, like the US, would rather have the stuff than the money.

And, since the US is a closed economy(meaning they can't use their dollars to buy our infrastructure), we sell them interest bearing bonds.

 

[SimpleDon]

So if there is nothing left to cut then the future generations will be asked to pay for it more directly with higher taxes ... or higher inflation, which is really just a regressive, stealth, wealth tax. Someone ALWAYS has to pay for a tax cut... just not the people who die before the repercussions kick in.

Tax cuts without spending cuts are not cuts at all, just the issuance of IOUs.

Yes, exactly, and these IOUs are in the form of Treasury bills. This is why tax cuts for the rich don't produce growth in the economy, that is, increased economic activity. The tax cuts create money but the money goes to the rich who by and large don't spend it, they save the money.

Only the money circulating in the economy produces increased economic activity. Money that is saved is money that is removed from the economy. The rich save their money by putting it into the stock market which produces inflation in the stock market, of course, but paradoxically this inflation is considered to be a "good" for the economy when it isn't. Or the rich buy real estate producing inflation in the real estate market which is also considered to be another paradoxical "good" that isn't because the inflation in the real estate market increases housing costs that have to be covered by wages, reducing the demand for goods and services in the economy.

But most likely they will buy the very same Treasury bill that is being issued to finance their tax cut! The rich then are richer but there is zero impact on the economy.

Once again, the fantasy economics of the self-regulating free market doesn't believe that it matters who gets the money from the government but it clearly does matter. The rich tend to save any additional money that they receive, say from a tax cut, while the non-rich tend to spend any such a windfall. The only study that I have seen for this, which I don't have at hand regrettably, discovered that there was a dramatic break at about the 90th percentile of income earned where those below the 90th spending 85 percent of a windfall and those above saving 85%.

 

[Toni]

We have a winner. That is indeed what she believes. She's objectively wrong on both counts (what the voters want and what will lead to Trump II), but that's her M.O. to a tee: opportunistically say what will get votes according to polls, then abandon those aspirations upon taking power. She won't fight for this because she has no intention of doing it; it's just a stump speech, not a lifelong purpose.

There's enough truth in that to reaffirm my preference for Bernie (I'm sure you'll be overjoyed at that! ). I'm still not planning to caucus for him, but I do think he is the most principle-driven candidate in the lot. Whether he'd be the most effective one... no telling.

I do think Sanders is very principle driven. I just think his main principle is that people should do what he says just because he says it.

 

[laughing dog]

So if there is nothing left to cut then the future generations will be asked to pay for it more directly with higher taxes ... or higher inflation, which is really just a regressive, stealth, wealth tax. Someone ALWAYS has to pay for a tax cut... just not the people who die before the repercussions kick in.

This has never been true. In fact, if we tried to pay off the national debt it would produce a recession, as it has every time that it has been tried. The debt could only be paid off by reducing the amount of savings in the economy, the amount of money circulating in the economy.

The federal government budget deficit creates money and puts it into the economy. Running a surplus to pay off the national debt takes money out of the economy. Too large of a budget deficit produces inflation. Too small of a budget deficit or a budget surplus produces the opposite of inflation, deflation. Deflation has to be avoided at all costs in the real economy.

This fact is just one of the many facts that are ignored in Econ 101, neoliberal and neoclassical economics that produced the so-called "Washington Consensus," on the debt and the economy in general. It is the difference between seeing how the economy really is and the fantasy of how many wish that it would operate, the Austrian/Libertarian free-market economy that doesn't need a government to regulate it.

All true, with the addition that this is the case when there is a foreign sector deficit. When trade is in surplus, govt expenditure can be balanced, or in surplus. Because in the case of a trade surplus, the private sector surplus, or savings, is coming from overseas.

When there is a trade surplus (i.e. a current account surplus), there is a capital account deficit (we send capital abroad). We receive foreign saving when we run trade deficits. This is a result of accounting, not economic ideology or policy.

Whether or not a gov't runs a deficit or a surplus is a matter of policy. A gov't can decide to run a surplus while the country enjoys a trade surplus. Whether or not that policy is wise is a different matter.

 

[ZiprHead]

So if there is nothing left to cut then the future generations will be asked to pay for it more directly with higher taxes ... or higher inflation, which is really just a regressive, stealth, wealth tax. Someone ALWAYS has to pay for a tax cut... just not the people who die before the repercussions kick in.

Tax cuts without spending cuts are not cuts at all, just the issuance of IOUs.

Yes, exactly, and these IOUs are in the form of Treasury bills. This is why tax cuts for the rich don't produce growth in the economy, that is, increased economic activity. The tax cuts create money but the money goes to the rich who by and large don't spend it, they save the money.

Only the money circulating in the economy produces increased economic activity. Money that is saved is money that is removed from the economy. The rich save their money by putting it into the stock market which produces inflation in the stock market, of course, but paradoxically this inflation is considered to be a "good" for the economy when it isn't. Or the rich buy real estate producing inflation in the real estate market which is also considered to be another paradoxical "good" that isn't because the inflation in the real estate market increases housing costs that have to be covered by wages, reducing the demand for goods and services in the economy.

But most likely they will buy the very same Treasury bill that is being issued to finance their tax cut! The rich then are richer but there is zero impact on the economy.

Once again, the fantasy economics of the self-regulating free market doesn't believe that it matters who gets the money from the government but it clearly does matter. The rich tend to save any additional money that they receive, say from a tax cut, while the non-rich tend to spend any such a windfall. The only study that I have seen for this, which I don't have at hand regrettably, discovered that there was a dramatic break at about the 90th percentile of income earned where those below the 90th spending 85 percent of a windfall and those above saving 85%.

 

[Horatio Parker]

All true, with the addition that this is the case when there is a foreign sector deficit. When trade is in surplus, govt expenditure can be balanced, or in surplus. Because in the case of a trade surplus, the private sector surplus, or savings, is coming from overseas.

When there is a trade surplus (i.e. a current account surplus), there is a capital account deficit (we send capital abroad). We receive foreign saving when we run trade deficits. This is a result of accounting, not economic ideology or policy.

Whether or not a gov't runs a deficit or a surplus is a matter of policy. A gov't can decide to run a surplus while the country enjoys a trade surplus. Whether or not that policy is wise is a different matter.

Right. I didn't mean other combinations were impossible, but its usually the case that trade surplus nations run smaller deficits or surpluses.

 

[Loren Pechtel]

Not so. The limitation to spending is productivity - if the economy can't absorb the spending, inflation will follow.

The deficit itself is irrelevant - it's a mirror image of private sector surplus. Fear of deficits is a holdover from the gold standard when the money supply was limited by the supply of gold. With a fiat currency, the money supply can expand or contract at will. The deficit is just a residual indicating money created and not taxed back. Debt issuance is another legacy of the gold standard, only now it serves as welfare for the rich, and is used by the Fed to maintain its overnight rate.

That honestly makes sense, that productivity is the deciding metric. But that borrowed money is still money spent that must be repaid, revenues must still be collected. So at some point down the road the tax cuts that were financed by borrowing are just deferred payments.

Is there a limit to annual deficit spending? Is it simply GDP?

If you do it with borrowing you'll reach the point nobody will lend you more money. (This is what crashed the Greek economy. The leftists were blaming the austerity conditions imposed by the IMF but the reason they went to the IMF in the first place is nobody else would lend to them.)

If you do it with the printing press you'll get inflation. You're actually funding it with a hidden tax on money. The limit will be when your economy melts down.