Never cut what you can untie.
Joseph Joubert
Political Potpourri
Election Eve: The Northeast Super Primary
Okay, I just made up the name 'Northeast Super Primary': New York, Rhode Island, Connecticut, Delaware, and Pennsylvania. I haven't seen many RCP-reported state-specific polls since Santorum's withdrawal (I think I saw a New Jersey one a few days ago), but Romney had been leading the polls except for maybe Pennsylvania before the withdrawal.
I checked for reports from Missouri over the weekend but didn't see any. The Wall Street Journal delegate count shows that Romney got 12 delegates (for a grand total of 697) to 7 for Santorum and 4 for Paul. Missouri has around 50 delegates, so I expect those will be awarded a few weeks from now at their state convention. Some 231 delegates are up for grabs tomorrow. We should see Romney get the lion's share, maybe even past the 900 delegate mark. It's now just a matter of grinding it out. This is just a case where Romney got the quick lead in delegates and never looked back.
Looking at the general campaign, I find it intriguing that less than a week ago Obama was 5 points behind Romney in the Gallup poll and today he's 3 up--plus reached 50 percent in approval. That's really odd because I would have thought with the recent Colombia sex scandal, if anything, he should have done worse. I will point out that the poll showed 9 percent undecided. If you do NOT already believe in Obama, you probably aren't going to vote for him as an undecided. I think Romney still isn't as well known to voters and I think he's still recovering from a rough primary campaign. However, he's struggling in some key battleground states. I have to say, though, that Romney's campaign has been much better than McCain, and I don't think I really believe some of these polls--it's one thing for a fresh-faced Obama to win 53% of the national vote, but only the most partisan voter believes that Obama has done a good job. Washington is more divided than ever; we're still tied down in the Gulf region; Europe is a mess; the economy and job growth are weak. We have nearly doubled public debt (i.e., not counting social security reserves) I think a lot has to do with how Mitt Romney runs the general campaign. I think he's a better politician than people think--this is a guy whom ran one of the strongest campaigns against Ted Kennedy as a political novice.
It's Time to Hold Obama Responsible
For Failure of Leadership
on Social Security and Medicare
I have been repeatedly focusing on unfunded entitlement liabilities. What do we mean by unfunded liabilities? In short, we are looking at the aggregate of the cumulative estimated benefits a current worker (and/or survivors) are expected to receive directly or have paid on their behalf (e.g., health care provider) over his/their lifetime from related cumulative estimated assets (e.g., employee/employer contributions, fund investment returns, any relevant Medicare premiums, co-pays, etc.) Actuaries will factor into account relevant inflation/adjustments, wage growth, early retirement options, new or projected benefits, final income basis for pensions, etc.
Let me point out a few inconvenient facts from a relevant USA Today column last year:
- there are 77-78M Baby Boomers (1946-1964), including the first year for Medicare enrollment
- demographic challenge: longer lifetimes and/or retirements (including early retirements), greater proportion of longer-living white collar vs. physical labor workers
- of the 48M current Medicare participants, 13M were added over the past 20 years: an additional 33M--a nearly 250% increase--will be added by 2030
- there is nearly a $25T shortfall in Medicare funding--and that includes unrealistic savings assumptions from ObamaCare, like a 30% cut in physician payments this year; last year alone the unfunded liability grew by almost $2T (almost a year of total federal revenues)
- there is nearly a $21.4T shortfall in social security funding, and that grows almost $1.2T annually
- these computations involve accounting procedures used in the private sector; the federal government uses different numbers, e.g., by not counting Treasury IOU's in the social security reserve and by counting the tax contributions of younger workers but not their future benefits.
- there is a $3.6T shortfall in military retirement/disability. Do you really think the government contributes resources as states and private companies have to?
- there is a $2T shortfall in civil service retirement/health benefits. Do you really think the government contributes resources like states and the private sector have to?
Some progressives will make suggestions about changing from a piecemeal reimbursement approach analogous to things I've mentioned in the past (e.g., see Sullivan's post here), but they have an ideological addiction for "well-managed nonprofits" like Mayo Clinic versus the private sector, that profits stand for rationing at the expense of the patient. They also believe, despite decades of mismanaging Medicare (pricing issues, fraud, etc.), the government bureaucrat or nonprofit person is able to micromanage a whole sector of the economy (despite an inability to manage its own internal affairs). Manhattan Institute points out a salient observation: "No health-insurance system, whether private or public, can “cover” all individuals or all medical services because resources are limited always and everywhere. This means that both private and public health-insurance systems must impose limits on the consumption of health care: Some classes of services will be denied to patients, and some classes of patients will be denied given services." For example, there are quite a few anecdotes about Canadians coming for treatment south of the border because of resource allocation problems.
And yet most policyholders are happy with the private-sector health coverage they have... Go figure. The truth is that the private sector has an incentive to look for cost savings--which doesn't come at the expense of the patient but in terms of being vested in cost savings for a given level of service.
Before going further, because I am annoyed by the polarizing rhetoric of certain fear-mongering senior citizen advocacy organizations (e.g., AARP), consider the following graph of what these organizations claim that their members paid for. Look very carefully at the Medicare line at the top: at minimum, each beneficiary type is expected to collect almost 3 times or more of what they/their employers paid into Medicare. Under what logic is this "fair" from an intergenerational standpoint? Clearly we have some obligation to people whom have paid into the system over the past four decades, but these kind of discrepancies cannot be overcome by the Democrats' favorite prescription of economically-crippling soak-the-rich, the-public-sector-can-manage-it-better policies:
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| Courtesy of urban.org |
So what led to this rant? A new report from the trustees today. According to The Hill:
The Medicare trust fund will be “exhausted” — meaning it won’t have enough money on hand to cover the benefits it’s supposed to provide — by 2024, the trustees said, the same time frame anticipated in a report last year. Social Security will reach that tipping point in 2033, three years earlier than predicted last year. “Under current law, both of these vitally important programs are on unsustainable paths,” Trustee Robert Reischauer said Monday.
Obama has shown little leadership here; in fact he has pushed on a string for a temporary reduced payroll tax (without a commensurate cut in pension payments). He utterly failed to take up the Bowles-Simpson deficit reduction committee. Don't get me started on the post's discussion of comments by Treasury Secretary Geithner: I've had to bite my tongue as this guy parroted Obama's talking points all through recent Sunday talk soup.
I will simply point out that the progressive obsession with lowering Medicare prices already below market is not going to be a fruitful endeavor, and a lot went into into playing games with baseline budgeting. We had a class warfare Medicare tax hike (surprise, surprise), but instead of offsetting unfunded liabilities growing over $1T a year, they are being used to help fund a new health entitlement program.
Whether Romney operatives are technically correct in arguing cuts from Medicare (versus decreases in baseline budgeting baked-in increases), senior citizens do have a legitimate gripe which they haven't been expressing that well: Obama and his Democratic cronies are getting their ObamaCare funding disproportionately from money needed to shore up runaway entitlement costs, instead of a more broad-based approach of government revenue collection. That simply is not fair.
I'm not going to outline a full solution here; I would like to treat poverty support consistently across age groups and privatize the senior entitlement programs from middle class and above. The chances of that happening are remote, given the partisan divide. That being said, we could at least set a sustainable ceiling on aggregate program costs and work backwards from that standpoint. For example, we could argue for a cap on higher-income benefits relative to their contributions, set a high-deductible based on income/wealth considerations, etc.
Also, I would like to see more market-oriented reforms, e.g., liberalizing immigration quotas for in-demand medical personnel, delegating routine medical matters to less costly trained non-physicians, allowing the marketing of health services across state lines, providing incentives for government-sponsored patients to seek out quality care or meds at lower prices, rollback unnecessary bureaucracy, paperwork, and procedures, etc.
An Interesting Partisan Tidbit
Although I joke about these things, I can't believe that we're spending as much time as we have over the GSA scandal, the Colombia sex scandal, Romney's means of transporting a family dog on vacation 30 years ago, and Obama's encounter with eating dog meat. Don't get me wrong: I think $44 taxpayer-paid breakfasts are wrong, but we are talking about the $5T Man in the White House.
The left wing of American politics is so far off the charts in terms of incivility, it's ridiculous. I'll never forget seeing a website back in 2008 where somebody was pretending to be pregnant teen Bristol Palin's unborn child screaming out for someone to put him out of his misery. I also remember when Obama, just before the House passed the Senate's corrupt ObamaCare bargain, had a bipartisan summit and then routinely interrupted with Republican Congressmen disagreeing with them. This was after GOP gave the Democrats fair opportunities to express their opinions without interruption. I can't count the number of times I've heard Debbie Wasserman Schultz talk over Republicans, whom gave her a chance to do her usual political spin. I used to be a Democrat; I once held more liberal positions on things until I took my first economics courses in the process of earning my MBA. (And the economics professors had no political agenda.) I had a favorite niece and nephew whom were strident Obama supporters in 2008. But I figured if I did something stupid in my salad days of supporting Jimmy Carter, they had a right to make their own mistakes. There are a lot of young people whom supported Obama in 2008 and have gone through a particularly brutal job market.
A lot of conservatives started out as liberals (e.g., David Horowitz, Dennis Miller, and Charles Krauthammer (once a Mondale speeechwriter)). A number of us started out as idealists and then as we approached midlife found our views had changed. Anyone reading my opinions realizes that I'm not a typical conservative: I've been an outspoken critic against intelligent design, I've been a strong supporter of the separation of Church and State, I hold many libertarian positions (e.g., on the military, legalizing the underground economy, and protecting privacy rights) and I have been a tough critic of populist Republicans like Sarah Palin.
Still, I enjoyed this tidbit from the Daily Caller:
The Pew survey [showing Republicans outscored Democrats on politics and political history according to “Partisan Differences in Knowledge"] adds to a wave of surveys and studies showing that GOP-sympathizers are better informed, more intellectually consistent, more open-minded, more empathetic and more receptive to criticism than their fellow Americans who support the Democratic Party.
Is the European Contagion Spreading?
Worries in Europe are climbing as a potential Hollande Presidency in France could cut the region-wise drive for austerity to contain unsustainable programs. It's even affecting Holland as failure to resolve budget negotiations in a recession which has driven unemployment up to 6% may result in a new government, as Dutch bonds now require the widest spread against (preferred) German bonds in years. I have not been discussing them in the blog, but I've been reading a lot of rumors about German unrest about carrying the rest of Europe on its shoulders, with voters increasingly irritated by German calls for fiscal responsibility, about German going back to its own currency (versus the euro), of others leaving the euro to go to their own currency (and escape the austerity regime), subsequently devaluing their currency. Some of the options being discussed are not allowed within the framework of the European Union.
Musical Interlude: My Favorite Groups
The Rolling Stones, "Get Off Of My Cloud"
