Off limits: bitching about how it shouldn't be called a fiscal cliff. I've been guilty of that one; but with only 19 days to go until December 31 it's too late now. Fiscal Cliff it is. Anyway the latest news seems to be the GOP are coalescing around asking for a raise in the Medicare retirement age. Ezra Klein wrote a really good post explaining why this is kind of a silly thing for them to ask. To wit: there's just no theory underlying it. It increases overall healthcare costs. Something I've mentioned before is that it really seems like the GOP are out of ideas. Voucherizing Medicare may have been a bad idea but it was at last an idea, and it's one that the voting public has rejected. At this point, they don't know what they want, they just know they want something. To a certain degree I think this underlies their inability to be specific about these sorts of things, whether it be on the campaign trail, or in these negotiations. This may get at deeper issues with the GOP (they've purged themselves of many policy experts, and in general seem to disdain the idea of expertise). Related: the crowing about Benghazi, which seems to be less about trying to understand whether or not there was a security lapse that can be addressed, and more about collecting a scalp. Any scalp.
Make no mistake, any such policy will be premised around excluding people who are going to be eligible in the next few years. Hell, if they thought they could get away with it, they'd probably make it contingent on voting Republican in the previous 3 presidential elections.
Kevin Drum breaks it down, but this bears repeating: we will never reach nineties level spending ever again. Our country is going to be older and old people cost money.
They're asking for it so that someone suffers. Their entire thought process is "we have to accept this thing that helps solve the problem but bothers us. So something has to bother you, too" not "so here's this other thing that also helps" They're negotiating like children because they think the entire point is that everyone has to suffer, not to actually solve the problems. It's like throwing in "And you have to paint the car yellow" to the buyer when negotiating an auto sale. edit: From Klein: NO. STOP. ENOUGH WITH THE FUCKING TIME BOMBS. We already proved that "this terrible thing that will happen if you don't get your shit together" doesn't work with this congress. Fuck you, there is no way to make that system work.
Until recently I would have been susceptible to a proposal to raise the Medicare eligibility age because it sounded sensible from a superficial historical perspective. I'd always heard the average life expectancy was 65 in 1965 when Medicare benefits were set at that same age. Now that life expectancy is something like 78 it seems like a big disparity that needs addressing. (Though my first preference would be to just go to single-payer all around.) Turns out that life expectancy number is not a real measure for Medicare as it included infant mortality which of course makes it look artificially low in 1965 vs. the present. Those infants never entered the workforce or took benefits, so they aren't relevant to Medicare. I found this gub'mint FAQ helpful (though it only has figures up to 1990). If we measure by the percentage of people reaching 65 after attainment of adulthood we've seen only a modest two year increase in the life expectancy of people living past 65 from 1960 to 1990. That seems pretty manageable to me even if one can assume we've added another year or two in the past couple decades. The FAQ also shows the percentage of the adult population making it to 65 going from ~65 to ~75%. (Also from 1960 to 1990) Again, this is an increase but it doesn't sound like something to explode Medicare over.
Also, poor people don't get as much of a gain in life expectancy, nor do they all want to keep working forever like politicians. So it makes the poor suffer to help the rich. That's why it's a good policy. Can't let them poors get a foothold.
I can't remember where I came across this, but you wonks might get a kick out of it. http://hastheusgoneoffthefiscalcliff.com/
The whole thing is dumb people being dumb and not understanding we measure debt as a percentage of GDP. Here's how you solve the idiot non-crisis: increase GDP. How do you increase GDP? It's nominal. Tell the Fed to increase it! Violins! We've done it! We've ended the debt crisis, reduced unemployment and fixed the deficit simultaneously because these are all symptoms of shitty monetary policy! Or hey we could attempt to decrease the numerator by cutting Federal spending while holding monetary policy constant. Based on the really obvious mechanisms at play and the recent experience of Greece and Spain and Ireland and Italy at cutting the deficit while holding monetary policy constant I can say with absolute certainty that the result will be a decline in GDP that leaves us looking at the same ratio of debt to gdp with the same deficit while earning less money. As a handy bonus unemployment will be higher too! Repeat three times and Violins! Depression! This is the dumbest fucking crisis I have ever fucking seen. Either all our policy makers are completely fucking retarded or we're dealing with extremely cynical motherfuckers whose explicit goal is to strip the poors of all social welfare protections so as to further entrench the existing distribution of wealth and income.
Oh wait I forgot to make an idiot policy suggestion so here's that: I think we should make people poorer by reducing their expected future income and see if that increases consumption! No? Amazeulous! Lets keep trying til it does!
People could perfectly understand the debt, the Fed could behave perfectly, and it still wouldn't matter. Weigel has a good piece explaining how Peterson and his friends have spend a half billion dollars pushing "debt crises" in various forms as a means to gut programs for old people. Dave points out he's got basically nowhere in convincing the public, because people are really not that stupid, but all the money buys a lot of media.
Based on the article it's the other way around. People understand the debt situation in aggregate, Fed isn't even close to cognizant, Congress has been hijacked by zealots and this irrelevant moron you've found an article on is continuing a multimillion dollar decades long journey through irrelevance.
I don't think you're "irrelevant" if you spend a half-billion dollars and everyone in DC knows you. Apparently ineffective, yes.
I dunno about you, but I'd also be interested in befriending a dude who shits gold bricks while tilting at windmills. I mean come on, free gold bricks!
Josh Barro has a plausible theory as to why the GOP won't be specific about the cuts it wants. TL;DR: Some of them are politically devastating (social security, Medicare), while the others (aid to the poor) are just not on the table.
http://www.economist.com/news/unite...americas-deficit-woes-are-so-intractable-edge ERHMAHGERD ERHMAHGERD FISCAL CLIFF ERHMAHGERD DEFERRRRCIIIIIITS OVER A TRILLION DOLLARS ERH MAH GERD!!!!! oh wait wut whups guess it actually doesn't fucking matter. I mean seriously can we have a not shit media for a change? This whole fiscal cliff thing is the most ridiculous pile of bull I have seen in quite some time, yet here it is on the cover of a publication I quite respect. Half a second with the brain engaged will indicate how little this matters. Even the people freaking out about it can't tell a coherent story about why it's bad other than the BIG NUMBERS ERHMAHGERD story. OH MY FUCK. We, as a nation, are literally punching ourselves in the balls and we CAN'T. SEEM. TO. STAHP. edit Oh wait now I get it: WE FUCKING LOVE PAIN!!!
So basically they want the cuts, they just don't want to be the ones who are proposing them. Pretty fucking cowardly.
Boehner just called off the Plan B vote for tonight, citing lack of support from his own party. Cantor should be making a statement shortly, interrupting his knife sharpening time.
The whole thing just got hilarious. Boehner unable to get his own party to vote for his plan, thus foiling his idea of making the President look bad when he said 'no' to it, gravely weakening what negotiating power he had, and at the same time likely term-limiting his own leadership of the Republicans. There should be some sort of cheevo for that.
God I love US politics. Best spectator sport in the world at present. Bachmann for speaker, please oh please oh please. Failing that Cantor. Bring on the dancing horses!
...And then they all went home for Christmas. What a freaking circus. So If Boehner can't get the support of his own party for his "fuck you Obama" end-run bill, what are the chances that he's going to be able to get their support for a compromise deal with the White House? It seems like the GOP nutter contingent is battening down the hatches in preparation to say "no" to anything short of complete capitulation on the part of the Democrats. Edit: OTOH, this might be the kick in the pants that Boehner needs to just man up and cut a deal with Obama. Rallying the troops failed--the Tea Party loons are clearly not behind him. And since the polls are clearly not with his party anyway, and his political future is looking bleak, maybe this is the moment where he decides to say "fuck you" to the Tea Party and pander to popular opinion instead. A compromise deal could pass, with strong Democratic support, even if the TP contingent opposes it.
Such a compromise would have to be very different than what's on the table today, Pelosi isn't going to deliver a hundred Democratic votes to cut Medicare and social security just so the GOP can run against them in 2014 on it.
I posted this elsewhere but it boggles my mind enough to say it again here. It's one thing to be a conservative and have a different but sane philosophy of government (as much as liberals would consider it to be stupid, in the same way conservatives consider liberals crazy.) But there is crazy and insane. From an AP article: I.e. Doctor: "You're going to have to let us amputate those two toes, they've got an infection. We'll only need to cut off the 4th and 5th toe." Patient: "NOOO!!!! I REFUSE to let you cut off those two toes! I love those toes!" Doctor: "If we don't cut off those toes, you'll lose the entire leg." Patient: "I'd rather lose my leg than lose those two toes!" It is literally insane. "We would rather taxes go up on everyone than let taxes go up on anyone." Some Republicans realize how stupid this is. What is really, really scary: The areas that vote for these Tea Party idiots are idiot enough they will never tie the actions of these Representatives to the consequences. If we go into a depression over their actions, they'll still blame it on Obama. And still keep voting these guys in.
A good article explaining that mindset: http://www.nytimes.com/2012/12/23/u...estraint-shifted-to-no-new-taxes-ever.html?hp Basically: it's ideology, not economics.
I have a new theory: deep down, the Democrats and the non-Tea Party Republicans realize all of the Bush tax cuts have to end but the only way to get there was to stage this debacle, using the Tea Party guys as an unwitting fulcrum. Everyone points the finger of blame at everyone else, they get to maintain an uncompromising front for their local elections, while in the end, taxes go up.
Been using this to keep up with what's going behind the doors: http://www.washingtonpost.com/blogs/post-politics/wp/tag/fiscal-cliff/
Physicians are looking at a 28.5% reimbursement rate cut from Medicare on Jan 1. And since most private insurers use the Medicare rates as the basis for their reimbursement...provision of health care is going to get ugly, fast.
In a sane world rather than just patching the SGR every year we'd acknowledge the huge cut isn't going to happen and take the accounting hit. BUT WE ARE NOT SANE.
It does look like a so-called small deal is taking shape, which will pair making most Bush tax cuts permanent (current rumor is up to 450k) while maybe adding some temporary stimulus. Matt Yglesias is kind of sour on this idea and so am I; you're giving up permanent revenue for some temporary stimulus. I'm not married to the idea of soaking the rich but in terms of negotiations this seems like a bizarre strategy.
The Dems really want a deal as long as it's not terrible, and politically that would be gold. "Hey, this whole dramatic mess? Because the GOP thinks $450,000 is poor and was willing to fight tooth and nail over it." I'm more and more getting the opinion that the GOP are just looking for scalps and have no actual pet thing they think would fix the budget if only they could negotiate it. They just want something painful to the Dems in the deal, and if a higher floor on the tax increase is it.. I'll take it.
Enh, I disagree. They really don't want taxes to go up, and they really want to cut entitlements. The problem they have is that both of these things are politically unpopular, and they also really want to win elections. Their ideal would have been the President offering some grand bargain with massive entitlement cuts that they'd reluctantly vote for and then hang around his neck.
