So not only were they doing the wrong thing, they were doing it for the wrong reason?
Haven’t you guys noticed that I’ve been advocating these ideas for a long time?
Look, the best way to get cost-containment in health care is to put the burden for paying for it back on the individual. That will force doctors and hospitals to compete on price to some degree, it will lessen the influence of insurance companies and cut the paperwork burden. It will also allow for more rational choices when choosing between expensive medical treatment and quality of life. I may choose to limp on a bum knee rather than wipe out my retirement savings to get a new one, but I sure won’t choose to do so if the government’s paying for it.
Since there’s no will to make everyone pay their own health care, the next best thing we can do is add deductibles so at least some burden falls on the individual. And then we can index it to wealth so the poorest people aren’t wiped out by health care costs, while the wealthy carry the lion’s share of the burden for their own retirement and health care.
This is consistent with my belief in smaller government. Why should wealthy people operate through a government middleman? if we can let them look after themselves, we achieve the dual goal of leaving more money in the system for poor people without growing the absolute size of government.
I’m surprised you guys think it is reasonable, because such ideas are almost always opposed by the left. In Canada we have universality because the left was afraid that if the rich could opt out, they’d get all the best doctors and facilities and leave the dregs to everyone else. And of course, many on the left simply want the government controlling such decisions and distrust private markets and especially the wealthy to be left to their own devices. You also hear the argument above that the minute it’s not universal it becomes ‘welfare’ and there will be pressure to dismantle it because the constituency won’t be large enough to support it.
Canada has started privatizing many of these services, and we’ve instituted a two-tier social security system with means-testing above a basic subsistence level of care, and none of these disaster scenarios have come true. Instead, we have a solvent retirement system and better health care. We’ve contained costs to the point where our per-capita health care spending by the government is actually lower than the U.S. government’s per-capita health care spending.
Just the increase. If the current level of FICA taxes isn’t enough to cover the entitlement shortfall, I would advocate raising it, but making the raise optional in the sense that the employee can choose to put it into a private savings account rather than being taken by the federal government. But when that savings account is drawn on in retirement, federal benefits are clawed back by a certain percentage of it.
This is what we do in Canada. We have tax-sheltered RRSPs for saving for retirement, and we have tax-free savings accounts. Government employees in many places are transitioning to health spending accounts instead of unlimited health care benefits, to help contain costs. When you retire, whatever income you draw from RRSPs or other income-generating methods is clawed back from the means-tested portion of SS. This ultimately means that if you’re someone with a modest income who can only be expected to save a few thousand dollars in an RRSP, there’s really no point because your savings will be clawed back anyway. But if you’re a wealthy professional who will have a million dollars in private savings, all you’ll get is the very basic government amount, which is less than half of what a person with no savings or income would get.
Or maybe slowly you’re coming around to my way of seeing things, like a frog in a pot of water over a fire. One day I’ll be talking about smaller government and more individual freedom, and you’ll say “A ha! Finally Sam agrees with me!”
(-:
I don’t think you’ll find anyone on the left in America (which is, obviously, quite different from the left in Canada) fighting you if you want to replace the entire social safety apparatus (health care, retirement, welfare) with the Canadian model. Hell, replace the tax code too, and I don’t think many Democrats will complain.
It’s the wrong reason only if you believe that the Dem approach is the only right one. Most of the country, if you go by how they voted last time, would suggest that the Tea Party way is the way they want to follow.
PS It’s also not necessarily the wrong thing, from where they sit.
Edit to add: I’m assuming you are referring to the Tea Party solution. It’s not clear from your partial quote that you are.
I’m referring to their rationale, as posted by you:
There’s plenty of room for debate about the proper role of government, appropriate and necessary levels of taxation, and a host of other things. But in light of two wars and Medicare Part D enacted under Republican majorities, just within the last ten years, anybody who thinks our current debt is solely due to Democrat spending is factually wrong.
We can go back farther than that. Republican presidents are responsible for the lion’s share of federal debt counting back since WWII.
I was trying to avoid hijacking the thread. But the wars and prescription drug benefit are recent, clear-cut examples. To lay the debt solely at the feet of Democrats is demonstrably wrong. And any actions based on that are unsupported by the facts.
There’s no way in hell the left in the U.S. would go for a Canadian model of government and taxation. Not unless we transported them back to the Trudeau era.
For one thing, our taxes are significantly less progressive than the U.S.'s. Our top federal marginal rate is 29%. Our federal corporate tax rate will be 12.5% next year (I think it’s 14.5% or 16.5% now). Our dividend and capital gains taxes are half what the U.S’s are. We do not have an explicit estate tax.
As a percentage of GDP, our government is now smaller than the U.S.'s government, and yours is growing faster than ours. We’re predicting to be bank in surplus budgets by 2015.
Our working classes bear a heavier tax burden than those in the U.S because we finance a good chunk of our government with a form of a VAT - a 5% Goods and Services Tax, which is a flat tax opponents say is regressive since poor people spend more of their income and therefore pay more GST. And the income tax applies at lower levels - if you make $20,000 per year in Canada, you’ll still pay $1,700 to $2,700 in income tax, depending on the province you live in. Everyone here has skin in the game. But because our taxes are broad-based, our revenue doesn’t vary like yours does in good times and bad, and our public is generally more supportive of fiscally conservative policies these days.
We also have a weaker federal government and give our provinces much more autonomy. For example, our public health care is provincially administered, as are most social programs, and Quebec even has its own provincial police force and its own retirement system.
The left always portrays Canada as an example of the success of left-wing policies, because Canada has the strongest economy in the G8 and they want to take credit for it. And in the distant past they’d be right about our leftward orientation. But in fact, Canada is much more conservative in many ways both culturally and fiscally, than is the U.S.
Canada has been quietly moving to the right since 1992 (under both Liberal and Conservative governments), and since that time we shrank government from 53% of GDP to 35% of GDP just before the crash in 2007. We turned huge deficits into surpluses with a 7:1 ratio of spending cuts to tax increases, and once our budgets were in surplus we used the money to lower our debt from 70% of GDP to 30%, then gave the interest savings back to the people in the form of tax cuts, giving us the lowest taxes we’ve ever had.
For example, our banks didn’t get into the trouble the U.S. banks did, but it’s not because of stronger regulation - our banks are simply more conservative by culture, and our government didn’t try to socially engineer home ownership through big clearinghouses like Fannie Mae and Freddie Mac. Nor do we have the kind of internecine regulations and exceptions in our tax code - there’s no home mortgage deduction here, for example. Also no legislation urging banks to give crappy nothing-down, principal-only mortgages to minorities and the poor.
Even our ‘socialist’ health care system is only 70% government-funded (compared to 50% government funded for yours). Large swaths of our health care system are fully private, and the trend is to move even more in that direction.
Think you could get the left in America to agree to cut the size of government by 30%, lower the top marginal rate to 29%, and cut corporate taxes by 2/3 and capital gains and dividend taxes in half in exchange for fewer loopholes and a national sales tax?
I actually don’t think you’ll find any disagreement on that score among the Tea Party. They are no fans of Bush’s, precisely because of his big-government ‘compassionate conservatism’. Why do you think they’ve got such a weak field of extreme characters in their presidential race so far? Because they are flat-out rejecting the people in the old Republican establishment. Why do you think they took such a hard line in the debt negotiations? Because they don’t trust Republicans like John Boehner to hold the line on spending.
The Tea Party is this close to becoming a third party, and it’s precisely because of their dissatisfaction with the old guard Republicans like the Bushes. And their dissatisfaction with them is entirely due to the old guard’s big-spending ways.
That said, they’re REALLY mad now because A) it’s a Democrat doing it, and we all know that partisanship exists - Just like Democrats may grumble about the Patriot Act and the wars under Obama, but they won’t march against him), and B) because the problem has reached a scale that is spiralling out of control and because they’re feeling the pain of the recession.
But no one denies that the Republicans are culpable.
Well, about the wars, we disagree - those are one time things (or 10 year things…). The Part D, though, is structural, as are most of our financial problems.
Take a look at Obama’s last budget from last February. It barely missed being passed, I think the vote was 97-0. His deficits, driven largely by American boomers retiring, were going to be $1.6Trillion in the first year, (very optimistically) coming down to $600b through 2018, then kicking into overdrive again. He doesn’t address the structural issues, namely SS, Medicare, and Medicaid. Puts it on the charge card for the kids to worry about.
At least Paul Ryan had the stones to propose something that had a chance to change all that, but instead the Dems demagogued it to death and refused to own the problem, despite having complete control for two years and control of Congress for 2 before that.
The Tea Party figures, the Dems have had their chance, and blew it. So they are there to save the day, so to speak.
I have two responses to that. One is that, as has been pointed out by others in the thread, it takes some pretty bizarre thinking to blame the overall debt solely on the democrats. More directly, however, this particular thread of conversation traces directly back to the claim that jtgain made in post #798 and my response to it post #821, which is the very narrow issue of whether the two sides in this issue are morally equivalent. And I claim it’s totally ridiculous to say so. The actions that the democrats took in the days and weeks leading up to the nearly-defaulting-crisis are in no way comparable to the actions that the republicans took. Heck, I’d be happy enough for you to believe that the democrats are WORSE than the republicans in all ways… I mean, I’d disagree, but it’s at least a vaguely discussable issue. But to claim that they’re equally responsible, to say “what? you’re blaming the repubs but not the democrats? But they’re both voting against a compromise, and thus for default! lol ur a hypocrite”, is just flat out ridiculous.
Then the proper time to bring up that issue is on Monday, when we set up the budgeting for the week. If your budgeting session on Monday drags on for hours and hours and hours and you have a big fight about it, well, that’s going to be unpleasant. But bringing it up at 11:30 on Wednesday adds a level of suicidal extortion to the situation.
An interesting issue, actually. One could make a fairly strong case that they have a mandate to balance the budget. It’s much harder to make a case that they have a mandate to balance the budget that is so immediate, urgent and all-encompassing that it calls for tactics hitherto undreamed of in the halls of Washington. Let me ask you this: at some point in the future, it will surely be the case that there will be an election in which the democrats make big gains. I mean, things always go in cycles, right? At that point, will you be comfortable with the new and empowered democratic majority looking at issues that they campaigned on, taking those issues to an extreme, and then using every last tactic or gambit, no matter how dangerous or unprecedented, to implement every last detail of these extreme positions, with absolutely no room for compromise in even the slightest bit?
Wow, excuse while I lace up my runnin’ shoes. Gotta start chasing those goalposts.
You said
And I said they were wrong.
That’s all.
And yet, you cover everyone. Trust me, if you try to sell Canadian-style health care in the US there is one party that will shut you down, and it won’t be the Democrats.
Where are you getting 30% cut in the size of government. According to Heritage the percent of government expenditures as a percentage of GDP for the US and Canada are almost identical (39.7% to 38.9%). And the tax burden as a percentage of GDP is higher in Canada as well.
We’ve had this discussion before, and I agree with you that the middle-class in the US pays too little. Politically this is very difficult to change with our political system (as compared to a parliamentarian system).
As far as the tax rates go, you failed to mention that the top rate kicks in lower in Canada. And dividends are taxed at higher rates than in the US for high-earners (except for non-eligible dividends). I do like that the dividend and capital gains taxes are progressive in Canada - that’s a nice feature to encourage investment without rewarding those who earn almost all of their income from investment.
I also agree with you that a consumption tax is a useful augmentation. And I believe I’ve stipulated in the past that I’m not sure which party would balk first at a consumption tax chained to a decrease in marginal income tax rates and a removal of some deductions. I guess we’ll find out in the “supercongress”, if they even have the balls to look at tax reform.
I will point out that exactly one party supported tax reform this time around, even in a revenue-neutral proposal, and it wasn’t the GOP.
Did the tea party campaign on a platform of “hey, we’d like to have a balanced budget. It’s important. But we’re not going to go about that through the normal budgeting process, involving cutting spending and raising taxes. Or, in our bizarre case, cutting spending and cutting taxes. Instead we’re going to take the debt ceiling, this thing that most of you have never heard of, something that is generally viewed as a pro forma acknowledgement that we’ve already screwed up, this thing that has been raised 100 times in the past 40 years, and when it comes time to raise it again, something that has to happen to avoid the US defaulting on its debts which would lead to massive catastrophe, then we’re going to refuse to do so until all our demands our met, rather than backpedal or compromise at all even the slightest bit.”?
The thing is, I don’t think you can get to a Canadian-style health care system, period. Not federally. There are way too many special interests and too many politicians who would win or lose in a wholesale restructuring of health care. And don’t forget - we have quite a lot of private health care here - so much so that most of our companies offer supplemental health insurance for professional employees, and government employees also have their own health care plans.
In Canada, everyone pays for their own prescription drugs unless they have private insurance. They also pay for most dentistry, eyeglasses and contact lenses, and a lot of other services.
Sorry, I was thinking about our transformation, when we reduced the size of government from 53% to 35%. You’re right that at the current time our governments are close in size, but the stats I’ve seen show that the U.S. government passed the Canadian government in size in 2009 - maybe Heritage’s data is a little older than that?
Also, I forgot to add (as I did in another thread) that in calculating Canada’s taxation vs the U.S. I would include the difference in deficits between the two countries, because deficits are simply a form of implicit taxation in the long run.
Totally agree. The parliamentary system has its drawbacks, but I’ve come to the conclusion that it’s a much better structure if you want to run a very big government.
But in the end, if our taxes are lower (or even equal), but a significant percentage of that tax comes from a GST and higher excise taxes, and our middle class bears a greater share of the rest, then the tax system must be less progressive.
Republicans have historically been for flatter, broader taxes. The problem with the current crop (as with the current crop of liberals) is that they’ve been burned by false promises and dysfunctional government for so long that I think both sides distrust any change from the status quo because they think they’ll be the ones getting the shaft.
For example, the Tea Partiers are staunch ‘no tax’ believers because in the past, every deal that’s ever been struck to trade higher taxes for spending cuts has resulted in higher taxes - and higher spending. The Republicans are as guilty as the Democrats in doing this, because tax increases are easy, and spending cuts are hard.
Yep. But that can change. Ultimately, what’s needed for both sides to support change is that they have to regain some trust in Washington. But with congressional approval ratings at all-time lows, that will be quite a task.
That said, it looks like the Tea Party is winning the public debate. A new CNN Poll asked the following question:
The results are that 60% of respondents approved, vs 30% who disapproved. But of the 30% who diapproved, half of them felt that the cuts weren’t big enough.
That means that the argument here that the cuts are too large is only supported by 15% of the public, which is about the same number who self-identify as ‘liberals’. Everyone else has moved to the side of smaller government.
If Sam Stone is right perhaps we should imitate Canada in economic policy.
If you are looking for me to say that Medicare Part D, introduced by W and passed by a GOP congress (I guess, too lazy to go look it up), was a bad idea fiscally (ie, not paid for through payroll taxes) then I completely agree with you. And yes, that wasn’t a Dem program per se (although most reasonable people understand that it was introduced by W to take the issue off the table for the Dems in the next election).
Now George Will, at the time, made a great case that if pharma technology was, in 1965, as big a piece of healthcare solution as it is now, then it would have been covered by the get-go. (Too lazy to find that one too, but I’m sure your google-fu is up to the task).
So I guess we can say that Part D wasn’t technically a Dem program. It was a liberal program (spend money we don’t have). And I see that others have pointed out that the Tea Party hates liberal GOPers (from their POV) almost as much as they hate liberal Dems (more, maybe). Which is why they went to war.
Are you under the impression that liberals believe that government spending is too low?
I am not saying that Dems are better or worse per se. I myself vote for quite a few Dems, and probably am more liberal than I am conservative. But from where I sit, if that’s the last train leaving the station before disaster (at midnight tonight, if Mr. Tax Dodger is to be believed), and anyone votes against whatever the deal is out there, then they are equally at fault. I don’t care about their motives, about mitigating circumstances, or about whether they are nice to old folks and kind to children and puppies. It doesn’t matter. The ***nicest ***thing I can call them would be cynical, if they are doing it, for example, to fire up a base for some future fight or election.
Unless you have tried and tried in vain to get the broad to listen to you, and she insists on creating the trash. Then you put your foot down.
See previous response.
You mean, elections have consequences? So if the Dems sweep into power then they get to vote for, oh I don’t know, some healthcare plan that most of America was against, using tactics never before tried for such a comprehensive, massive, gamechanging bill, like ‘Reconciliation’ and ‘Deem and Pass’ and other completely backhanded stuff?
Am I OK with it? Let’s just say, I understand why they’d do it, if they believed in it so much.