Let’s Make a Deal

Let's make a deal

The last deal negates all of the concessions made in the other deals — for those of us who will choose to live in Free States.

Miss Brooks’s “Grand Bargain”

The idiot known as David Brooks — The New York Times‘s idea of a conservative — is true to form today:

Imagine you’re a member of Congress. You have your own preferred way to reduce debt. If you’re a Democrat, it probably involves protecting Medicare and raising taxes. If you’re a Republican, it probably involves cutting spending, reforming Medicare and keeping taxes low.

Your plan is going nowhere. There just aren’t the votes. Meanwhile, the debt ceiling is fast approaching and a national catastrophe could be just weeks away.

At the last minute, two bipartisan approaches heave into view. In the Senate, the “Gang of Six” produces one Grand Bargain. Meanwhile, President Obama and John Boehner, the House speaker, have been quietly working on another. They suddenly seem close to a deal.

There’s a lot you don’t know about these two Grand Bargains….

You are being asked to support a foggy approach, not a specific plan. You are being asked to do this even though you have no faith in the other party and limited faith in the leadership of your own. You are being asked to risk your political life for an approach that bears little resemblance to what you would ideally prefer.

Do you do this? I think you do….

You do it because while the Grand Bargains won’t solve most of our fiscal problems. They will produce some incremental progress. We won’t fundamentally address the debt until we control health care inflation….

Both Grand Bargains produce real fiscal progress. They aim for $3 trillion or $4 trillion in debt reduction. Boehner and Obama have talked about raising the Medicare eligibility age and reducing Social Security benefit increases. The White House is offering big cuts in exchange for some revenue increases, or small cuts in exchange for few or none. The Gang of Six has a less-compelling blend of cuts, but it would repeal the Class Act, a health care Ponzi scheme. It would force committees across Congress to cut spending, and it would introduce an enforcement mechanism if they don’t. Sure there’s chicanery, but compared with any recent real-life budget, from Republican or Democratic administrations, these approaches are models of fiscal rectitude.

You do it because both bargains would boost growth. The tax code really is a travesty and a drag on the country’s economic dynamism. Any serious effort to simplify the code, strip out tax expenditures and reduce rates would have significant positive effects — even if it raised some tax revenues along the way….

In other words, Republicans should simply give in, on Miss Brooks’s say-so.

But Miss Brooks doesn’t know what he’s talking about.

First, with respect to “health care inflation,” government is the problem, not the solution. There are two key reasons for rising health-care prices, aside from innovation that yields expensive but effective drugs, procedures, and equipment. They are (a) the tax break that enables employers to subsidize employees’ health plans and (b) the subsidization of old folks’ health care via Medicare and (indirectly) SS. Those two interventions result in the overuse of health-care products and services. (There’s a 25-year old but still valid RAND study on the subject.) A far better system — if one insists on government involvement — would be to provide means-tested vouchers that can be redeemed for a  limited menu of vital medical products and services (e.g., critical surgeries, cardiovascular medications, chemotherapy). That’s it — no more Medicare, Medicaid, or their expansion via Obamacare.

Second, with respect to “tax expenditures” — there ain’t no such thing. Any action that results in higher taxes is a tax increase, no matter what Miss Brooks and his fellow Democrats choose to call it. And tax increases are growth inhibitors, not growth stimulators.

So much for the wisdom of The New York Times‘s pet “conservative.”

Related posts:
The Laffer Curve, “Fiscal Responsibility,” and Economic Growth
Our Miss Brooks
Rationing and Health Care
The Perils of Nannyism: The Case of Obamacare
More about the Perils of Obamacare
Health-Care Reform: The Short of It
Toward a Risk-Free Economy
Undermining the Free Society
The Constitution: Original Meaning, Corruption, and Restoration
The Unconstitutionality of the Individual Mandate
Does the Power to Tax Give Congress Unlimited Power?
Does Congress Have the Power to Regulate Inactivity?
“Tax Expenditures” Are Not Expenditures
My Negotiating Position on the Federal Debt

The Incredible Shrinking Obama

Sizing Up Obama” (April 24, 2009):

On the one hand, we have FDR II, replete with schemes for managing our lives and fortunes.

On the other hand, we have Carter-Clinton II, ready to: kowtow to those who would bury us, create the illusion that peace will reign perforce, and act on that illusion by slashing the defense budget (thereby giving aid and comfort to our enemies).

Through the haze of smoke and glare of mirrors I see a youngish president exhorting us to “fear nothing but fear itself” while proclaiming “peace for our time,” as we “follow the yellow-brick road” to impotent serfdom.

The schemes persist, most notoriously (but not exclusively) in health care “reform,” about which Arnold Kling writes today:

What is misleading about statements (a) – (k) [taken from Obama’s speech on September 9] is that each of them referred to a plan that, strictly speaking, does not exist. As far as I know, the Obama Administration never submitted a plan to Congress. . . .

If you are going to repeatedly refer to “my plan” or “this plan” or “the plan I’m proposing,” then unless you have a plan you are lying. The only question is whether it is a little lie or a big one. Obviously, most people think it is only a small lie, or the President would have been called out on it. However, I think that health care policy is an area where there is too much temptation to promise results that are economically impossible to achieve. In that context, my opinion is that giving a speech in favor of a nonexistent plan is a really big lie.

Now — on the 70th anniversary of Stalin’s invasion of Poland — comes Obama’s decision to placate the Russians and insult our allies in Eastern Europe:

President Obama dismayed America’s allies in Europe and angered his political opponents at home today when he formally ditched plans to set up a missile defence shield in Poland and the Czech Republic.

The project had been close to the heart of Mr Obama’s predecessor, President Bush, who had argued before leaving office in January that it was needed to defend against long-range ballistic missile attacks from rogue states such as Iran and North Korea.

But it had hobbled relations with Russia, which considered it both a security threat and an unnecessary political provocation in its own backyard.

At a White House appearance today, Mr Obama confirmed that the defence shield envisaged by the Bush Administration, involving a radar base in the Czech Republic and interceptor rockets sited in Poland, was being abandoned. . . .

“The decision announced today by the Administration is dangerous and short-sighted,” the No 2 Republican in the Senate, Jon Kyl, said in a statement.

Mr Kyl said that the shift would leave the United States “vulnerable to the growing Iranian long-range missile threat” and would send a chilling message to former Soviet satellites who had braved Moscow’s anger to support the system.

“This will be a bitter disappointment, indeed, even a warning to the people of Eastern Europe,” said Mr Kyl, who pointed out that both Poland and the Czech Republic had sent troops to Iraq and Afghanistan. “Today the Administration has turned its back on these allies.”

Senator John McCain, Mr Obama’s defeated Republican White House rival in 2008, said he was “disappointed” with the decision and warned it could undermine US standing in Eastern Europe amid worries there of a resurgent Russia.

“Given the serious and growing threats posed by Iran’s missile and nuclear programmes, now is the time when we should look to strengthen our defences, and those of our allies,” he said in a statement.

“Missile defence in Europe has been a key component of this approach. I believe the decision to abandon it unilaterally is seriously misguided.”

The good news is that Americans seem to have wised up to the Obama scam:

Obama's net approval_090917Sources: Rasmussen Reports Daily Presidential Tracking Poll and Health Care Reform Poll. Overall net approval ratings represent the difference in the number of  respondents strongly approving and strongly disapproving of Obama (negative numbers mean net disapproval). Health care ratings represent the difference in the number of respondents supporting and opposing Obama’s health care “plan,” or what they take to be his plan.

The mini-wave of approval that followed Obama’s health-care speech on September 9 seems to have dissipated. Obama’s appeasement of Russia, if it becomes widely perceived as such, will only push his numbers further south.