Links 12/12/2012

Apparently raising the age of eligibility for Medicare is on the table.

Some useful links explaining why this is a bad idea:

Brad Delong quoting several

Aaron Carroll




Republican Positions

I could spend a great many posts focusing on the immense hypocrisy of the present Republican Party platform as it relates to budgets, taxation and entitlements.

Identifying flip-flops and hypocrisy is important as it can tell us something about the true motivations of our elected representatives.

I will ignore all of this, however, and simply try to point out the awfulness of their current position.

What is the current Republican position? Let’s lay it out.

1. We have major debt problem, we have to do something about it right now.

2.  We will not raise tax rates on the top 2%.

3. We will not extend tax cuts solely for the middle class. Present tax rates for the top 2% must also be included.

4. We will only raise revenue by limiting or eliminating tax deductions we shall not name.

5. We will not identify tax deductions, but we will not touch the preferential tax treatment of capital gains and the carried interest loophole.

6. We should cut entitlements, like Social Security and Medicare. Probably by raising the age of eligibility for both programs. Though we have not come out and said what we should cut in entitlements. But we insist we should cut entitlements.

7. We do not support the extension of unemployment benefits, or, if we did it would be a major concession in any deal.

8. We will not raise the debt ceiling until we can agree on something.

9. Obamacare should be on the table too. We don’t like it.

I will try to respond to each of these.

1. We have a long-term debt problem that must eventually be dealt with. We do not have to deal with it now. Interest rates on Treasuries are at historically low levels. If you have faith in the market, then you must admit that the market is not at all worried about our debt. In contrast, we have a jobs crisis. As seen by the still-elevated unemployment rate.

2 and 3. Those at the top of the income distribution are paying historically low effective tax rates. They are also performing extremely well relative to the rest of the population. They are the class of people who have fully recovered from the great recession. Asking these individuals to pay the same tax rate on income over $200,000/$250,000 as they paid in the 1990s is not socialist or the end of the world. According to the CBO, allowing the lower tax rates to expire for higher-income would generate $824 billion. This is not an insignificant amount of revenue.

3. This is foolish and needs no comment, but I will say that the President campaigned on this issue in 2008 and 2012 and won both times, as did a Democratic senate. Democrats won more votes in the House than Republicans did, but you know, gerrymandering and redistricting of congressional districts.

4. I will quote the Center for Budget and Policy Priorities:

To even come close to replacing the revenues from letting the high-end tax cuts expire with a cap on itemized deductions that targets high-income taxpayers and does not affect middle-class families, policymakers would have to virtually eliminate all itemized deductions for households with incomes over $250,000.  Moreover, to avoid a massive increase in effective tax rates, policymakers would have to phase the cap in over an extended income range above the $250,000 level, reducing the revenue it would generate.

5. Preferential treatment of capital gains primarily benefits high-income individuals. See Warren Buffet’s tax returns. Also, Mitt Romney’s tax returns in 2010 and 2011.

6. Social Security is not in crisis. Medicare will eventually be quite costly for the government. However, for all of their demands for entitlement cuts, most Americans don’t want to see cuts. Also see my response to point 3. Also see Salon.

7. The current problem is a lack of jobs and not the amount of debt, so this seems like a strange reordering of priorities that would have a detrimental effect on the economy.

8. This could have a negative effect on the economy.

9. Obamacare passed Congress in 2010. Obamacare largely survived the Supreme Court’s scrutiny in 2012. Obama won re-election in 2012. For some reason all I can think of is Dumb and Dumber. Only the question asked is “what are the chances we can repeal Obamacare?”

Taken together, we have a series of awful positions that, if they came to pass, would negatively affect the low and middle-income individuals and families in this country. It would hurt, not help the present jobs situation. It would push our society to one of even greater inequality. It would disadvantage the most vulnerable. It would help the most fortunate. This seems like a strange platform to run on in 2012.