Medicare for All – Or Progressive Overreach?

Bernie Sanders Medicare for All

Elizabeth Warren is right: “We must be willing to fight.”  Politics in this country is totally dysfunctional.  The economy isn’t much better.

We absolutely need “Big Structural Change,” starting with reforming a political system awash in money. A system where wealthy individuals and big corporations write the rules, while middle class wages stagnate; where the rich get richer, not by investing, but off of inflated stock prices and asset values that somehow passes for economic policy.

The thing is – if we are going to fight – let’s make sure it is the right fight.  Medicare for All isn’t going to happen in four years, as Bernie Sander’s Senate bill stipulates.  The health care and insurance industries are a huge part of our economy.  You can’t just upend the system overnight.  You risk major political and economic disruption.

Medicare for All is absolutely the right approach, in our view.  But we have to figure out a way to do it without scaring the hell out of more moderate voters, and handing Republicans a cudgel to beat us with.

How about we keep it simple – a public option that expands Medicare to include prescription drugs, vision and dental.  One that is administered by the Federal government and that anyone can buy into at cost with no insurance companies in the middle making money by denying health services to people in need.

Just to be clear.  It is not Pete Buttigieg’s “Medicare for All who Want it,” or Joe Biden’s “Medicare-like” plan, code language for insurance-company administered “Medicare Advantage” plans.

It is a government-administered, nation-wide public option.  Full-stop.  It allows Medicare for All to be phased in over time as more and more people become aware of its benefits vis-a-vis private insurance including lower costs and higher quality services.

Yes, taxes will still have to go up to cover the additional services, but not nearly as much, at least in the early years, as Elizabeth Warren has advocated in her proposal to pay for Medicare for All.  And, of course, total costs go down because you have a more efficient, nation-wide network without insurance company profits adding to costs.

We can still raise taxes on the wealthy and big corporations, to make our regressive tax system fairer and more progressive.  Let’s just use some of the proceeds to pay for other priorities including education, job training and infrastructure investment.

A true Medicare public option is still a heavy lift.  Just being willing to fight won’t cut it;  we are going to have to fight like hell.  Just as it did during the Obama Administration, the insurance industry is going to attack a public option with everything it has – and it has a lot of money and paid-in-full political influence.

But at the end of the day – or make that the election cycle – we have a lot better chance to bring about real change if we don’t get carried away with over the top rhetoric and set unrealistic goals and timeframes.

Let’s fight to make our system fairer and more progressive, and ensure everyone has access to quality health care.

But let’s do it in a way that brings people along and doesn’t scare the hell out of moderate voters who may need more time to get their head around the idea, despite an onslaught of Republican propaganda, that “We are Not Socialists; We are Progressives” who care about people; who prioritize quality health care over insurance industry profits.

Progressive Economics: A Long Overdue Conversation

The U.S. Economy is broken. Long-term economic growth is fluctuating on average between two and three percent which ranks this as perhaps the worst economy since W.W. II excluding major recessions.

Decades of adherence to “supply-side” economics (translation: tax cuts for the rich)  is mainly to blame.

In addition, advances in information technology, globalization, the decline of unions, and the government’s virtual abandonment of worker protections, have caused wage stagnation which , in turn, has led to lackluster demand and slower overall growth.

So how do we fix it?  Well, we should do the exact opposite of what has been done for decades since the 1980’s.  Rather than cutting taxes, we should be investing to grow the economy.  The technical name is “demand-side” or “Keynesian” economic theory.

Under this approach, the government can stimulate demand and growth by investing directly in infrastructure, such as highways and rail systems, and in people, in programs such job training, health systems and education. That’s what progressive Democrats are getting at when they talk about things like the “Green New Deal” and “Medicare-for-All.”

In effect, the Progressive wing of the Democratic Party is having a long overdue conversation about failed economic policies and what is really needed going forward to distribute economic benefits more equitably to all Americans and grow the economy through increased demand.

How do you pay for it?   Thanks in large part to long-standing adherence to “supply-side” economics since the 1980’s and resulting tax cuts, we now have a hugely regressive system where wealthy individuals, who derive a significant portion of their income from dividends and capital gains, pay less in taxes as a percentage of income than average working men and woman.

And if that isn’t bad enough, our tax code is riddled with loopholes that corporations and other wealthy individuals and businesses often use to avoid taxes altogether.

It needs to be fixed – and that is what Democrats are getting at when they talk about raising taxes on the wealthy: It is really about making our tax system fairer and more progressive so we have the resources  needed to invest for the future, stimulate economic growth and reduce income inequality.

And so those who have benefited the most, pay taxes in proportion to the benefits they’ve received.

Radical ideas? Hardly. They worked in the aftermath of W.W. II, one of the greatest periods of overall economic and wage growth in American history. And they can work again.

Let’s start by at least having the conversation and not demonize as “radicals” and “socialists” those who dare to talk about important economic issues affecting the lives (and livelihoods) of everyday Americans.  And let’s admit that there will be compromise along the way.

Let’s keep talking, respectfully, to each other.  Let’s not be distracted by those, including much of the mainstream media, who want to turn everything into a conflict, a virtual war of opposing ideas and ideals.

And when we are done talking, let’s try to actually get something done, because the economy (and our political system) is broken and change is long overdue.

The Real Debate Over Health Care: the Role of the Insurance Companies

A lot is being written over the fissures within the Democratic Party on Health Care. Some, like Bernie Sanders, unequivocally support Medicare-for-All. Others, like Amy Klobuchar and Sherrod Brown, both Midwest senators with more conservative constituencies, want a more incremental approach, a Medicare buy-in option for example, or lowering the age for Medicare eligibility from 65 to 50.

Sounds good, right. Medicare-for-All is way too radical. A more moderate approach stands a better chance of getting the broad-based support needed to get through Congress and be signed into law.

Except that the insurance companies, with their web of campaign contributions and armies of lobbyists, will pounce on any compromise and turn it into a variation of what we have today – a system with huge overhead and administrative costs that rewards waste and inefficiency over positive health outcomes.

Sound familiar – that’s essentially what happened with Obama Care. State-by-state exchanges just to make sure there are no incentives to create national plans that operate more transparently and efficiently.

So Progressive Democrats are right – it is time for universal health coverage in a nationwide program that takes the insurance companies out of the mix, thereby saving U.S. economy and the American consumer huge amounts of money that today are wasted on a system that rewards administrative inefficiency over the health of the American people.

A Middle Class Under Siege

Tony Auth, Philadelphia Inquirer

As Republicans roll out the details of their disastrous tax plan, it is not a bad time to take a step back, tune out the media hype , and contemplate what is really going on in our democracy.

Since the 1700’s, America has led the world in the development of democratic processes and institutions.  It is hard to admit that something has gone terribly, terribly wrong.  And yet it has.

For one thing, we elected Donald Trump President of the United States.

But, in our view, that is just a symptom of a much larger malaise.  The economy is in long-term decline and our government no longer works for the benefit of most Americans.

For decades after WW II, the American middle class was the envy of the world.  Today, that same middle class is struggling just to make ends meet.  Wages are stagnant; the level of income inequality is extreme.

Donald Trump tapped into this angst to get elected; Democrats, sadly, were oblivious to the struggles of the very people they were supposed to represent.

The tax debate currently taking place in the United States illustrates a big part of the problem – our political system has been hijacked by big money interests proposing to do just the opposite of what is actually needed.

Slashing taxes on the wealthy and major corporations, as Republicans have proposed, will almost certainly exacerbate income inequality and force cuts in services that primarily benefit the poor and middle class.

Many wealthy individuals, who rely primarily on capital gains and income from assets, already pay less as a percentage of their income than people who work for a living.  That is not fair.  It is almost certainly the reason Donald Trump will not release his tax returns.

Out tax system is already regressive.  Let’s not make it even worse.  Better yet, let’s fix it so the wealthy actually pay their fair share.

You don’t have to be a big-shot Ivy League economist to know that the American middle class has historically been the engine of economic growth in the U.S.  Yet under Republican proposals, by targeting additional tax breaks to the rich, the economy is more likely to shrink further, not grow.

Are you listening Democrats?  Will you take a stand up against the big money interests, oppose so-called Republican “tax reform” in all its nefarious forms, not get drawn in when Republicans throw you a bone like keeping deductions for state and local taxes, and finally do what is right for the American economy and its beleaguered middle class?

Let’s help fix our democracy by making damn sure this latest incarnation of tax cuts for the wealthy is consigned to the dust bin of history where it belongs.

O Canada, Health Care, Glorious and Free

It is smooth sailing for Canadians accessing quality health care at reasonable cost. Shelburne Harbour, Nova Scotia, Sept. 14, 2017. TheDemocraticView.com

My wife Mary and I recently took a short vacation to the Maritime provinces.  We visited Yarmouth and Shelburne, among other small towns along the South Coast of Nova Scotia.  We reveled in the natural beauty of the landscapes and the warmth of the people we met.

The only time it got even remotely strained was when a Canadian customs agent asked “the purpose of our trip” and I joked that “I was seeking asylum from Donald Trump.”  Oops! As a veteran of the Vietnam War protests, I was remembering a time when Americans did flee to Canada to escape the draft, and were mostly welcomed.

Today, I am told, Americans are fleeing once again, but this time many are seeking access to the Canadian health care system which most closely resembles the single payer, “Medicare for All” approach advocated by Bernie Sanders and other Democrats.

But unlike the Vietnam War era, the welcome mat is not out.  The custom agent (and wife Mary) were visibly upset with my half-assed humor.  Before letting me through, the agent made me prove we had travel reservations for the return trip to the U.S.  Canadians, understandably, do not want to bear the costs for Americans looking for access to affordable health care.

The Canadian health care system is not perfect.  Some services are not covered, like dental, vision and mental health. Users must pay out-of-pocket or carry private insurance.  Still, basic health services are free; total per capital costs are significantly lower than in the U.S. and health outcomes, such as life expectancy and infant mortality, are better.

All citizens, Franklin Roosevelt once proclaimed, have a “right” to a living wage, housing and health care.

Obamacare was a positive step in that direction.  In their latest effort, the Graham-Cassidy bill, Republicans are trying to roll back Obamacare not because they believe in “states rights,” as their latest, repackaged rhetoric would have you believe.  Rather, Republicans simply want to avoid paying higher taxes to subsidize low income folks – even if that means effectively denying basic health coverage to millions of people.

Well, democracy has a price.  Franklin Roosevelt understood that.  Canadians understand it and are living it every day.  But somewhere along the line, many Americans lost sight of basic democratic values of justice and equality.  People struggling to make ends meet should never have to choose between food on the table and a visit to the doctor.  Never.

Republicans, motivated by big money and corporate interests, are once again assailing our basic rights – and we need to fight back.

O Canada! Our home and native land!

With glowing hearts we see thee rise,

The True North strong and free!

Beyond Charlottesville: Addressing Underlying Causes of Racism and Violence

Racism and violence, of the kind we saw in Charlottesville, Va, this past week always merit our outage and condemnation.  But we have to be careful. Such attitudes pose a subtle danger: they can be overly simplistic and serve to obscure underlying issues that contribute to the unrest.

History has taught us that racism and violence are often symptoms of a deeper malaise rooted in economic hardship.  That was one of the lessons learned from the Nazis in W.W.II. They were able to exploit people’s economic anxiety and fear to create a police state that persecuted and killed Jews and other minorities.

America today is not Nazi Germany.  But there are parallels, not the least of which is an elected leader wiling to stoke fear and division for political gain rather than encouraging people to come together to pursue a greater, public good.

Meanwhile, economic opportunity and upward mobility have all but vanished for many Americans, rural and urban, white and black.  People feel trapped; there’s no place to go; the future looks bleak, and they lash out at everyone and everything that is different from them.

In a democratic society, we have a responsibility not only to condemn the racism and violence, but also to try to understand and address underlying issues – including pervasive poverty and a broken economy that leaves people feeling frustrated and trapped with few options for improving their lives.

Of course Trump has said many times that fixing the economy so it works for everyone is a central goal of his administration.  But his is purposefully misleading rhetoric designed to inflame passions rather than heal wounds.  The problem is all those immigrants and foreigners taking our jobs!  Trump and others like him are the problem, not the solution.  Scratch the surface of his policy proposals and its tax cuts for the rich that is at the core of Trump’s agenda (and that of his Republican allies in Congress).

The reality is that fixing the economy requires just the opposite: raising taxes on the wealthy, whose incomes have skyrocketed in recent decades while wages for working Americans have stagnated.   Taxes on high earners are at the lowest point in modern history.  The proceeds of the higher taxes should be invested in basic infrastructure, roads, bridges and transit systems – and in people, in health care, education and job training.  That would stimulate job creation and economic growth for all Americans.

Particular emphasis should be placed on investing in inner cities and rural areas where poverty and lack of opportunity are most pervasive.

Sounds like a heavy lift, and it is.  Politicians who propose higher taxes of any kind quickly become fodder for a flurry of attack ads.

Fortunately, there are some politicians willing to step-up:  Senator Bernie Sanders, the former Democratic presidential nominee, for one; more recently, Mayor Bill de Blasio of New York  proposed a tax on those earning over $500,000 to pay for long overdue subway repairs that primarily benefit working class New Yorkers.

We should always condemn racism and violence in all its forms, but we should never stop searching for the underlying causes and work to address those issues.  A rigged economy, that favors the wealthy while leaving working and poor people behind, is a contributing factor to the kind racism and violence we’re seeing in Charlottesville (and around the word).

The very fabric of American democracy is fraying.  It is time to fix it, with real, concrete economic reforms that improve the lives of all Americans, black, brown and white.

Here We Go Again – More Supply-Side B.S.

Supply-Side B.S.

Donald Trump’s tax plan, unveiled Wednesday, calls for massive tax cuts for corporations and the wealthy (i.e. “small business”). He also threw a bone to the “middle class” in the form of increasing the standard deduction from $12,700 to $24,000 for a married couple.

All justified in the name of jobs and economic growth. Economist and New York Times columnist Paul Krugman has famously labelled the economic growth argument for tax cuts as “Voodoo Economics.” We think Krugman is being too kind. Our name for supply side economics can’t be printed, but the initials “B.S.” more accurately reflect our view.

As Krugman has pointed out on numerous occasions, there is no evidence that tax cuts stimulate significant economic growth. In fact, history has proven the opposite to be true: in periods when tax rates were high relative to today’s rates, economic growth was more robust than during periods of lower rates.

In the two decades after W.W. II, for example, personal income tax rates averaged more than 80% for the highest earners, and yet economic growth was robust, averaging more than 4%. In contrast, during the administrations of Ronald Reagan and George W. Bush, personal income tax rates were slashed, but economic growth fell to 3.5% and 2.1% respectively.

Today, the top rate for personal income is 39.6% for married filers earning more than $466,950 a year, while growth is averaging an anemic 1.5%. Trump, for his part, wants to cut the top rate to 35%. The last thing we need is yet more of the failed policies of the past.

What’s wrong with the supply side theory? It sounds good, and it has popular political appeal (which is why Republicans have used the argument so successfully to justify tax cuts) but it doesn’t stand even a common sense smell test. It smells like, well, B.S.

Cutting taxes on corporations and the wealthy may stimulate marginal investment, or, just as likely, more profits will be redistributed to shareholders in the form of dividends and increased capital gains. And, oh by the way, those dividends and cap gains are taxed at a top rate of 20% – a much lower rate than ordinary income, a double bonanza for the rich.

To make matters worse, Trump has proposed eliminating the “estate tax” on accumulated wealth (currently levied on estates valued at over $5.45 million for an individual and $10.9 million for a married couple). Triple bonanza!

“Supply side” economics is simply code language for redistributing income to the wealthy, including Donald Trump and most of his appointees.

If you really want to stimulate the economy, you should invest for growth – in job training and education; in infrastructure including clean power, roads, bridges, mass transit and high speed rail, the things that actually make our economy run. That is what we did in the period after W.W. II, when we educated veterans on the GI bill and built the interstate highway system, among other initiatives, and it worked.

To fund this investment without blowing up the deficit, yes, we would have to raise taxes. But maybe it is past time raise the rates on “unearned” income, such as dividends and cap gains, so the wealthy actually pay their fair share.

To Slow Global Warming, We Need a Carbon Tax

Trump Environmental Regulations

Over the past two weeks, Donald Trump proposed slashing the budget of the Environmental Protection Agency (EPA) and began the process of gutting environmental regulations.

Among the regulations he would roll back are Obama-era restrictions on coal-burning power plants, limits on hydraulic fracking and a moratorium on the leasing of public lands for coal mining.

Trump has also proposed doing away with a requirement that Federal agencies consider the “social cost” of carbon when evaluating energy-related policies.

The latter issue is particularly relevant in Trump’s case.

It is no accident that Trump’s Secretary of State, Rex Tillerson, is the former CEO of ExxonMobil.   Trump is essentially proposing to give the industry a free ride to exploit resources for private gain while the general public is forced to eat the “social costs” of energy extraction including global warming and environmental degradation.

His claim that rolling back environmental regulations will “create jobs” is a diversion. What those regulations are really doing, and why Trump is gutting them, is they hurt the profits of the energy companies.

Gutting environmental regulations may create a few additional jobs in the very short run. But in the medium to long term, it will actually do just the opposite, making the U.S. less competitive in an emerging and rapidly growing international clean energy industry.

Energy companies (and by extension consumers of fossil fuels) should pay the full cost of energy extraction, including the cost to slow global warming and clean our air, rivers and streams. The best and most efficient way to do that is “carbon tax” on power plants and other emissions.

A carbon tax would be so efficient and economically productive, according to the NY Times, that even many Republicans support the concept.

Proceeds could be used to stimulate economic growth by investing in clean energy technology, retraining displaced workers in industries such as coal mining, and building environmentally friendly infrastructure such as mass transit.

As an initial step, we should raise the Federal gasoline tax, a form of carbon tax. The gas tax has been 18 cents for more than two decades. Why? Because the U.S. Congress is so dysfunctional it can’t get its act together to raise the tax in line with inflation — even as gas prices have plummeted in recent years.

Clean energy is the future. The U.S. needs stronger environmental regulations, not weaker ones. We need an Administration that doesn’t pander to the energy industry to maximize its short-term profits and shift costs onto the general public. And we need a tax on carbon emissions to create the incentives needed to slow global warming, clean the environment and grow our economy.

It Is Not Rocket Science: Here’s How To Fix Obamacare

What’s wrong with Obamacare?  Is it rising premiums and lack of choice, as some Republicans would have you believe?  Or is it that insurance companies don’t like the increased transparency and competition that comes with health care exchanges?

Or, as Libertarians such as Ron Paul argue, is Obamacare just another expensive “entitlement” program that fosters a culture of dependency on government handouts?

To be sure, rising health care costs are a problem.  But that was the case long before Obamacare, and the recent Republican proposal is likely to make matters worse, not better.  Simply providing tax credits, as Republicans propose, does virtually nothing to constrain costs or improve quality of care.

Instead, the way the Republican plan controls costs is to pay individuals a fixed amount based on age.  This approach effectively cuts benefits and disproportionately hurts the poor and middle class.

What is really going on is Republicans (and some Democrats) appear most concerned about protecting insurance companies from competition – and from the government using its leverage to negotiate prices.  Others seem to want to limit health care subsidies in order to constrain the size and scope of government and avoid higher taxes – even if that means most Americans will not have access to decent, affordable health care.

It is not rocket science: To fix Obamacare, we should provide everyone with a Medicare buy-in option with subsidies scaled to age and income.  Government would continue to negotiate prices directly (or through subcontractors) with health care providers.

Medicare has the advantage of a network infrastructure already in place.  Providers are accustomed to using it.  It is efficient and cost effective and the quality of care, as many Medicare participants will attest, is excellent.

A similar proposal was debated when Obamacare was first introduced, but dropped because it was considered unlikely to pass at the time.

However, now is the time to act.  Democrats must push back hard on Republican orthodoxy that big government is universally bad.   Not only is single payer health care efficient and cost effective, it is good for the economy.  Providing health care to employees is a major cost of doing business, and lower overall costs have the potential to make American business more competitive.

Moreover, under a Medicare buy-in approach, individuals could still be given the option of using credits to buy directly from the insurance companies (although it would likely be more expensive), or purchase supplemental or “Cadillac” coverage.

By almost every major measure, costs are lower and overall health outcomes better in countries, such as Canada and the Netherlands, that offer single payer, universal health care.

What’s not to like about quality health care at affordable prices for all Americans – along with additional options for those who want it and can afford it?

Well, for one thing, insurance companies likely won’t make as much money.  And members of Congress would probably see a sharp reduction in campaign contributions from the insurance lobby.

It comes down to this:  high quality, affordable health care for all Americans v. bigger profits for insurance companies.

We’ll let you know how that works out.

Memo to Donald Trump: Want to Fix Our Crumbling Inner City Neighborhoods? Here’s How.

Philadelphia Mural Arts

Relocating Federal workers to inner city neighborhoods is one way to help revitalize those neighborhoods and stimulate much needed investment. Federal tax credits would also help …

America has one of the highest poverty rates in the industrialized world.  It is a living tragedy and a national disgrace, as TDV wrote recently.  Much of the poverty is located in rural areas, including Appalachia, the deep South and Southwest.  But many big cities also have high poverty rates, including Philadelphia, which ranks among the most poverty stricken urban areas in the country.

And yet in Philadelphia and other big cities it sometimes feels like a Tale of Two Cities.   Millennials are moving back and downtown and surrounding neighborhoods are booming.  Travel outside the downtown areas, however, and you will still find sections of the city that time forgot, with vacant houses, potholed streets and dilapidated buildings.

Donald Trump has called for increased investment in our inner cities, labelling them “ghettos” and  a “disaster.” He has also been roundly criticized, and rightly so, for overstating how bad things really are.

In many urban neighborhoods, there is a resilience and vibrancy that is easy to miss if you don’t get out of your car.  The “drug bazaars” of old are largely gone; crime is down, and commercial areas are coming back in many areas.

But Trump is right about one thing:  the infrastructure of many urban neighborhoods is in bad shape and now is a good time to invest, to build on the progress that has been made in reducing crime and revitalizing commercial districts.

But we need to throw out the old playbooks, think more creatively, and develop more comprehensive approaches.  These include, in addition to rebuilding infrastructure, attracting business, fixing the often broken school systems and providing quality support services including low and moderate income housing, job training and child care.

A good way to start the ball rolling is to move government agencies into those neighborhoods.  Such an approach provides an economic anchor that can be used to better deliver services while attracting additional investment and jobs.

One model is the Sharswood / Blumberg Transformation Plan in North Philadelphia where the Philadelphia Housing Authority intends to locate it headquarters, anchoring a revitalizing commercial district including low and moderate income housing and rehabilitated public schools.

But why limit it to just local agencies? How  about moving Federal agencies to our inner cities?  Such as approach was recently proposed by Fred Kupiec, a resident scholar at the American Enterprise Institute, writing in the Wall Street Journal:

Many towns and cities across America would welcome the economic development and stability that accompanies a well-paid federal-agency workforce like the FBI or the Labor Department. The expense of managing the federal government should be used to spread wealth beyond the nation’s capital and revitalize the economies of America’s ailing cities.

The Federal government should also provide tax credits to those who build affordable housing in our inner cities.  The burden for providing credits to stimulate investment in our inner cities falls too heavily on local governments whose budget is already strained by a diminished tax base and high demand for services.

Let’s hope Donald Trump keeps his word.  Our inner cities can use the help, and it is long past time for the Federal government to do its bit.