Today Ezra Klein posted an interesting piece about the Euro crisis that confirms what I have thought for some time.
You may have heard the standard right-wing talking point that the current economic woes in Europe are directly tied to entitlements. Conservatives made a similar claim about the US deficit, which is why we’ve been talking about that side of the equation instead of higher taxes until recently (thank you OWS).
Both claims, of course stretch the truth — a lot.
The economic downturn (due to the subprime mortgage disaster) and tax cuts for the wealthy are the prime factors in the US deficit.
Entitlements are also not the boogeyman in the European crisis.
Klein’s piece, “A larger welfare state can mean a lower deficit” highlights the case of Germany, which has a hefty welfare state — but didn’t suffer from any of the problems faced by Greece and other Euro-zone countries:
Take Germany. They have a pretty big welfare state: pensions, health care, paid vacations, unemployment benefits equal to two-thirds of one’s income. Indeed, the Organization for Economic Cooperation and Development keeps track of social spending — unemployment, old-age pensions, health care, etc — as a percentage of GDP. In 2007, Germany spent 25.2 percent of their GDP on such things. Greece spent 21.3 percent on social policies. Yet Greece is in crisis, and Germany is fine.
As recently as 1965, the cost of those two systems competed neck-and-neck. That year, Canada spent 5.9 percent of its GDP on health care. The United States spent 5.7 percent. But around that time, Canada was transitioning to its current single-payer system. Over the next four decades, the growth of health-care costs slowed in Canada while it accelerated in the United States. By 2009, Canada was spending 11 percent of its GDP on health care — and covering everyone. The United States was spending 17.4 percent of its GDP and leaving 45 million uninsured. In dollar terms, we’re spending $3,600 more per person, per year, than Canada.
I’m not an economist, but there seems to be some consensus in the articles that I have read that what Klein states is true.
I have seen no convincing evidence that European woes are principally caused by entitlement spending.
In fact, Klein makes a good argument that a strong healthcare system could act as a bulwark against deficit:
If the United States had Canada’s health-care system, and Canada’s per capita health-care costs, we would have a much “larger” welfare state, but we wouldn’t have a deficit problem. Assuming we weren’t spending that money elsewhere, we wouldn’t even have a deficit. Likewise, if any country in the euro zone maintained the United States’s health-care system and our health-care spending, it would have a smaller welfare state, but it would be sagging beneath a debt burden far more onerous than anything anyone in Europe is facing today.
- Contrary To Republican Rhetoric, Europe Is Not In Trouble Because Of Spending And Debt (thinkprogress.org)
- The European Debt Crisis in Three Graphs (bostongazette.wordpress.com)
- A Bankrupt Uncle Sam Hypocritically Lectures Europe On Debt (forbes.com)
Her name is Spike Dolomite Ward, and she has written an apology to Obama about her previous stance on health care reform:
Ward is a 49-year old self-employed mother who was recently diagnosed with breast cancer. She could not afford health insurance:
Fortunately for me, I’ve been saved by the federal government’s Pre-existing Condition Insurance Plan, something I had never heard of before needing it. It’s part of President Obama’s healthcare plan, one of the things that has already kicked in, and it guarantees access to insurance for U.S. citizens with preexisting conditions who have been uninsured for at least six months. The application was short, the premiums are affordable, and I have found the people who work in the administration office to be quite compassionate (nothing like the people I have dealt with over the years at other insurance companies.) It’s not perfect, of course, and it still leaves many people in need out in the cold. But it’s a start, and for me it’s been a lifesaver — perhaps literally.
It’s amazing what it takes for people to cut through the nonsense notion that America has the best healthcare system in the world.
There’s much to fault with the existing healthcare reform, but there are also a great many provisions that are essential and help a great many people.
Gene Lyons has a post up at Salon that captures what I have been thinking about the upcoming mid-terms and the “Obamacare” scare tactics.
In “Don’t be fooled by the GOP’s sick healthcare rhetoric” Lyons makes some good points about the right’s plan to run on a distortion of Democratic accomplishments.
Is there anybody capable of filling out Form 1040 EZ who buys this latest Republican fantasy? Alas, yes. A clamorous minority remains captive to the GOP’s decades-long War on Arithmetic. The more dramatically “conservative” economic dogma fails — there’s nothing conservative about believing in magic — the greater their cultlike need to believe it.
But Lyons makes an important observation in the next graph:
Obamacare’s problems, however, are somewhat of the White House’s own making. Polls have shown that while the law’s unpopular in the abstract, its constituent parts earn wide approval. That’s partly because GOP propaganda, “government takeover,” “death panels,” etc., scared low-information voters; partly because the bill’s so complex that few really understand how it works.
It is simply not a believable argument that Republicans are going to repeal Healthcare Reform. The logistics aren’t there for them to win a veto-proof majority, and if the Democrats would merely make the Republicans answer exactly what popular provision they would like to cut (or, not answer, as the case may be) there is little chance this meme will remain potent.
The article also outlines exactly what is wrong with the Republican position. They treat healthcare as a commodity, and of necessity eliminate people who have preexisting conditions from having access to treatment. To save money.
“Obamacare” addresses this by mandating insurance to increase the pool, and lower the costs for everyone.
The Republican plan tackles costs by — oh, wait. They don’t have one. Except for the red herring of tort reform (which does not lower costs in any way according to studies in states where it has been enacted).
In any case, the county isn’t going to go backward.
Lyons cites a Robert Wood Johnson Foundation study that shows that 4 in 10 respondents don’t think there is enough reform in the legislation.
In order to tackle the nation’s problems, we need a serious discussion about how to fix things and be honest about what sacrifices we need to make.
Eventually, some form of single payer will have to be enacted. It presents the most cost controls, the least complex administration and the most benefits.
If the Democrats were smart, they would run on trying to pass that. The tide is turning.
- Pence: Repealing healthcare reform is a mainstream GOP position (thehill.com)
- GOP ‘Pledge’ Includes Repealing Reform Law (abcnews.go.com)
- Cornyn: ‘We Need To Keep Expectations… Fairly Modest’ About Health Care Repeal (VIDEO) (huffingtonpost.com)
So, the Republicans haven’t learned a thing since their “Contract With America” was revealed for the utter fraud that it was.
Their new “Pledge To America” is rife with distortions and what FactCheck.org politely refers to as “dubious claims”:
The report starts with a damning summary that takes “The Pledge” apart — revealing it for the cheap publicity stunt that it is.
- It declares that “the only parts of the economy expanding are government and our national debt.” Not true. So far this year government employment has declined slightly, while private sector employment has increased by 763,000 jobs.
- It says that “jobless claims continue to soar,” when in fact they are down eight percent from their worst levels.
- It repeats a bogus assertion that the Internal Revenue Service may need to expand by 16,500 positions, an inflated estimate based on false assumptions and guesswork.
- It claims the stimulus bill is costing $1 trillion, considerably more than the $814 billion, 10-year price tag currently estimated by nonpartisan congressional budget experts.
- It says Obama’s tax proposals would raise taxes on “roughly half the small business income in America,” an exaggeration. Much of the income the GOP is counting actually comes from big businesses making over $50 million a year.
On healthcare, the stimulus bill, the economy, taxes and small business, the GOP pledge presents a fiction.
What is important to remember is this tidbit:
Fact: It’s true that the economy lost nearly 8.4 million jobs from the peak of employment in December, 2007 to the bottom of the job slump in December of last year. More than half (4.4 million) were lost before Obama took office. The economy has regained 723,000 jobs since hitting bottom, according to data from the Bureau of Labor Statistics.
So, the economy is turning around after being driven into the ground during the last administration.
Look at the record. That’s what things like this “pledge” purport to do. As as you can see, the Republicans have to make things up and want don’t want accountability for what they did.
Don’t let them get away with it.
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