Tuesday, April 30, 2013

Bos'n Paul Ryan - Not Ready For Stand-Up Comedy

So, did you hear the one about the Congressman who ran in Kentucky on a platform of Death Panels, Nanny State and Socialism?  He won because his opponent was soft on gun control.

As Steve Rattner notes in today's NY Times, Congress is moving slow astern with the sequester when the economy still needs full ahead.  Budget scolds like Paul Ryan view the sequester as a triumph, even as we go dead in the water while  nearing the shoals of double dip recession.  This is no surprise. Ryan may have a great workout routine in the gym, but as a stand-up, his routine would be missing both of the critical stand-up comedy basics - honesty and timing.

Let's start with honesty, and give Representative Ryan some points for recognizing the obvious.  Nations need to limit their debt and demonstrate budget discipline. The thesis that debt exceeding 90% of GDP is a drag on growth now appears to be overstated, but at some level of debt and deficit, the government will face rising interest costs (producing a spiral of ever higher debt and deficit) and unacceptably high inflation. Right now interest rates paid by the US Treasury are low because safe investment alternatives are scarce, but this won't last forever. Representative Ryan is also correct in noting that Medicare and Medicaid loom large on the horizon of government obligations as our population ages and medical costs soar.

So,  Paul Ryan is a cute, personable guy who's honest enough to talk about serious deficit issues, why no prospects for a second career in stand-up?  Well, let's take a closer look at honesty and think about timing too.  The time to run a surplus is when the economy is booming. The $238 Billion surplus in 2000 was our largest ever.  We could have maintained a significant surplus right through 2007, retired more than a trillion of that debt Paul is so worried about and demonstrated the kind of budget discipline that would help keep interest rates low even in our deficit years.  Instead Paul Ryan chose to spend like a drunken sailor - that's right, Bos'n Paul gave us the Bush tax cuts, Medicare Part D and the War in Iraq - what could have been surplus for those boom years became a widening deficit.  Now, when the economy needs fiscal stimulus, Bos'n Paul has decided to sober up.

It's not just a timing problem.  Even now, in the middle of a recession that is still punishing a generation of new workers, Bos'n Paul is less sober than he seems.  End of life care, prevention and administrative expense are the low hanging fruit of medical cost reduction - the places to start if you want results. An early version of Obamacare included advisory boards to assist families with difficult end of life care decisions, a process in which elderly and very infirm patients frequently receive painful, unnecessary, unwanted and expensive surgeries shortly before death because doctors sometimes recommend them and the families just can't say no.  Naturally Bos'n Paul welcomed this baby step in the direction of reducing end of life care costs, right? Not quite, he bellied up to the bar and  after a few shots he began screaming, "Death Panels" ,over and over and over.

When it comes to prevention, Paul Ryan is all for anything that will save a health care buck - ban the big gulp, require posting of nutritional information, support programs that bring improved diet and exercise to the poor and working, but uninsured, poor, build clinics that treat illness before it requires exorbitantly expensive hospital care - Not!  Bos'n Paul won't spend a nickel even when he knows it will save a dollar.  He does secretly like the big gulp ban, but only because it gives him a chance to have a few drinks with his budget scold shipmates and scream, "Nanny State', over and over and over.

Surely a guy like Paul Ryan would consider anything to cut administrative costs, right?  Well, single payer health care systems like Canada spend less than 2% of what the US does on per capita administrative costs. Normally a market would function more efficiently than a large government bureaucracy, but in health care the demand (that would be the patients) doesn't really get to shop around between suppliers.  Even when a patient has a choice, there are usually no posted prices. Insurance companies and employers are health care middlemen who sometimes limit choice, but always add layers of administrative expense and prevent the functioning of anything resembling a true market.  Why not at least consider expanding the single payer system we use for Medicare? This approach, or even the much watered down "public option" that was ultimately dropped from Obamacare, can't get a serious hearing because the insurance and medical lobbies are just too powerful.  Bos'n Paul would rather take their campaign contributions (someone has to pay for all those drinks) and shout "Socialism" over and over and over.

What do you get if add a sequester to a recession?  A depression and a lot of new Congressman.

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