The economy

Waiting for the chop


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Most Americans are not freaked by The Sequester. For a half-decade, we've seen worse. The military needs right-sizing, as do the regions around D.C. What - they'll have fewer madams? Thinking people are accustomed to Obama's management by made-for-media crises. But thank goodness, the WH is doing its part to cut down by cancelling tours. But not cancelling any of the chief's resident's golf games or political travel.


People elect a government after inhaling tons and tons of media exhaust.Then they branch away& look at the entertainer only!


Frank Underwood would have fixed it but Congress was outbid by Netflix

Is there anyone with enough juice in Congress to stand up and shout:-

"HEY, what sort of love is this? Do we hate America so much that we can treat Republican or Democrat, about half of the entire population, as our mortal enemies? Where is your love for the American people you are here to represent? I remind you that you are here to represent ALL Americans, not just those who voted for you, not jut those who gave you money. It's time to renew your vow to always act in the best interests of the American people and rediscover the love previously denied to those who chose red over blue and vice-versa. Stop this sectarian politics and get back to the job the American people demand you do first - make Americans richer, not poorer"

Fredlinskip in reply to Illuminati19

Congress has been enacting policies that HAVE been making Americans richer for 30+ years for those that matter (and to lesser extent the investor class who have endured “slings and arrows of outrageous fortune” clinging to their coattails).
$ talks, bull walks is lesson 1 for an aspiring Congressman. Government policy by highest bidder. Need to price quality college education beyond reach of the masses. Labor is cheap and profits are soaring. Life is good. For the rest of America- well, their purpose is to serve.
What?-You’re saying this isn’t the American dream?

Illuminati19 in reply to Fredlinskip

I wish I didn't agree with you but I do. To my mind the United States is controlled more by the aristocracy now than it was in 1776. I am also of the opinion that it is the descendants of the Jeffersonian Democratic Republicans who are most responsible for this dynamic. It makes me feel deeply ashamed and angry that more than a million Americans died, some of whom were my direct ancestors, only for their hard-won democratic rights to be sold to the highest bidder.

If you really want to have a look at what's been going on, the Center For Responsive Politics runs a website called There you can view every piece of legislation considered by Congress since 1998. You can also see which firms lobbied on which issues and make your own mind up about what the $32 billion they spent from 1998-sept 2011 actually bought them.

heart of flint

"If you wanted to cut the deficit in the most damaging way, you’d choose the sequester."

But the only people who would want that would be those opposed to all cuts. By presenting the worst possible alternative, they have the best chance of continued unchecked spending. It's not so irrational after all.


Actually the sequester is not the most damaging way to cut the deficit. The most damaging is to keep postponing doing anything it. Washington has been like a person who needs surgery, but is too terrified to schedule it. At least now the government is on the gurney to the operating room, albeit kicking and screaming.


What a joke. Not one of the examples listed as a source for growth is valid. The housing market is improving? Look at the figures, prices have gone up because the number of foreclosed properties has gone down. Private equity, banks and investors have been buying homes by the thousands with the hope of selling them in 4-5 years. However the most important indicator, first time buyers, has continued to fall year after year.

The "wealth effect". Another crock of ... baloney. The Fed and your governments have been spreading this yarn for years. If the wealth effect is so strong, why is unemployment/underemployment so high? The middle class is not enjoying a wealth effect. They are struggling with day to day expenses. The only people enjoying a wealth effect are the welathy.


If the goal is to lower debt:
Cut spending gradually. Let's not mimic England (and others)
Go after off-shore tax havens. Let's not just cut food stamps and education programs.

QmYjcQVrhg in reply to Fredlinskip

The problem is that UK has not cut the public sector enough.
Business and the taxpayer have all that extra weight to carry as well.
The public sector productivity has been falling since the 1970's


Failure in Leadership has a price. Failure in the ability to compromise has a price. The extremists in both parties and the White House have failed the American people. They should be impacted first, but they believe they should be "exempt". We have had enough.


Let's take just one arena where sequester cuts will hit to expose the "socialism" of the American system (that most Americans are in denial about) - Air Traffic Control. In the USA, air traffic controllers are employees of the FAA, a federal government agency. They therefore represent an essential service vulnerable to the vagaries of politics. They, their funding and therefore their service are pawns to thw whims of the federal government.


By contrast, in (much more socialist!) Canada air traffic controllers are employees of NAVCanada "the country's civil air navigation services provider, is a private sector, non-share capital corporation financed through publicly-traded debt" (Source: NAVCanada website). When looking at their Annual Report, all their revenue comes from Customer Service Fees i.e. user charges. The government does not subsidize air traffic control in any way.


You tell me, America, which way is better?

Duckdawdger in reply to guest-ionssij

It just shows how blind, ignorant and parochial most Americans are in that you actually believe you are still the greatest nation on earth. There is nothing anecdotal about an, albeit brief, comparative assessment of two ways of providing essential services.
Economically, Canada currently is dependent on the USA however that doesn't mean we are in any way more screwed than the USA. Look at all the government finance numbers and Canada is in far better place. Look at all the statistics on social freedoms, business competitiveness, quality of life, gun violence, etc. and again Canada is in a far better place. Those statistics are not anecdotal.
Most of the posts herein are endeavouring to assist American policy makers to reverse their self destructive trajectory because we believe that a functional America is necessary in this world. But first, we need to confront your state of denial, there are none so blind as will not see.

guest-ionssij in reply to Duckdawdger

Canada does not protect individual freedom as much as the US. That alone makes us, Americans, exceptional and less socialist. We don't have anything like your "Canadian Human Rights Commission" that limits freedom of speech. And the second amendment is still the ultimate protection against tyranny.

But here is the bottom line, the immigration flows show that the number of Canadians who are willing to leave their homeland searching for a better life to the US is higher in absolute and relative numbers than the number of Americans that go to Canada searching for the same. So!

guest-ionssij in reply to Fredlinskip

I doubt it. Certainly not colder than in Washington state or Minnesota. They run away from the higher taxes, less income and less freedom. We get their best and brightest while Canada gets our laziest (ie, those addicted to entitlements). So it's a pretty good deal for us.

Duckdawdger in reply to guest-ionssij

Canada does not protect individual freedom as much as the US. That alone makes us, Americans, exceptional and less socialist. - Who's drinking the KoolAid now?
I tend not to argue with American exceptionalists on this comment forum, however when they spout blatant untruths about Canada, I feel I must say something. On protecting individual freedom, you may be correct but only if your are a well off, straight white male. Socially, women, gays, non-whites and the poor are far less disenfranchised and enjoy far greater equality of individual freedoms in Canada than in the USA. I won't go into chapter and verse on this because I know guest-ionssij simply can't believe that the USA is in any way repressive to all those population groups in American society. Freedom to choose (i.e. abortion rights), universal health care, equality of marriage laws for straights and gays, uniform non-discriminatory voter registration, greater freedom of fear from gun violence (the second ammendment is actually one of the ultimate causes of tyranny to victims of gun violence), greater freedom of speech as Canadians do not need to fear not sounding patriotic, etc. These are all areas where Canadians enjoy greater individual freedoms. And finally, we enjoy the freedom to be humble without the tyranny of having to be exceptional. When Americans come to that realization, they will be far better off.

Brantgoose1 in reply to guest-ionssij

The idea that Canada is "socialist" is a myth manufactured by conservative think tanks and others of that ilk to use Canada as a bogey-man and a "Horrible Example". It is bought into largely by some Canadian liberals and leftists because it flatters their ideals and values. It is not true. Canada is no more socialist than the US is, and often less so.

One, although the "Second Amendment" is intented to ensure a well-regulated militia exists by preventing the disarming of citizenry, nobody has disarmed Canadians nor are they likely to--Canadians have as many guns as Americans. The Canadian Human Rights Commission is hardly an enemy of freedom of speech and in any case, the US does have hate speech laws as strong or stronger than Canadian regulations. Neither of these are innately less socialistic or more socialist--they have nothing to do with socialism at all. Socialism is the ownership of productive capital by the workers or a worker's state and Canada is no more prone to state capitalism or worker's ownership than the US. The closest we come is farm coops and the like.

Furthermore, the US medical system is a mixed private-public system just like Canada's, only it costs 150% as much and doesn't cover the full population.

In terms of freedom, the right-wing Canadian think-tank, the Frazer Institute, produces annual reports which show that Canada has one of the most pro-business, free, and unoppressive business environments on Earth, and similar think tanks and studies from the US or other countries confirm this.

In many ways, Canada looks more like the conservative's ideal of the US than the US does. With the deeply conservative Harper Government in power, there is little reason for would-be socialists in Canada to delude themselves that we are a socialist nation or even a social-democratic nation like Sweden, which itself is very conservative in many ways. It is a consitutional monarchy, after all, like Canada, and has made economic and political reforms that were very difficult and costly to its reputation as a socialist or quasi-socialist social democracy.

The US is a very politically-correct country. Canada is very similar and not far behind (compared to the UK where PC values and legislation such as anti-smoking legislation, gay marriage, etc., is playing catch-up at best). There's no more and no less freedom, socialism, capitalism, or legitimacy and value in the Canadian and American systems. We are both private-public partnerships where some slight variations in focus and freedoms exist, but now overall economic or political differences.

For example, your medical care system is MORE expensive and MORE socialist if any thing than ours. Your public healthcare alone costs more than Canadian public and private healthcare combined. HMOs and hospital chain administration are even more rebarbative forms of bureaucracy than government bureaucracy, and all the more arbitrary and cruel for being profit oriented and a snake with a thousand heads.

Your welfare system, your social security, your health care, your unemployment insurance system, even your minimum wages are just as "socialist" as ours and often more so. Compare the minimum wages of US states and Canadian provinces. You will find that about half of your states have more generous minimum wages than ours in Ontario or Quebec, the two provinces where two thirds of our population reside. Only Alberta is an outlier and it is a petro-state which doesn't even have a sales tax because it has a massive resource trust fund to pay the bills, like Alaska's government cheques to residents out of Alaska's own massive fossil fuel and other resource royalties.

In short, it is arrant nonsense to say Canada is a socialist country. Canada is no more socialist than the USA, and I equally object to the right wing claim that the USA is a socialist country, or unfree, or turning into a left-wing dictatorship or any of the other arrant clap-trap that the propaganda machine of the reactionary right churns out.

Both Canada and the US are very free capitalist economies with a healthy state presence to guarantee the health, safety, security and fairness of our public and private business.

The Eighteenth Century Tories and Whigs who created so many of your myths--such as the conservative myth that the sole duties of the state are to provide police and military protection--were wrong.

In a democracy, as in a monarchy, the Sovereign decides what the duties of the state are. When the Sovereign people of Canada or the United States demand that the government jump to protect them, the environment, or the nation, it is not the government's business to demurr, but rather to ask how high and how fast the Sovereign wants them to jump.

And perhaps not even that much protest is to be admitted in a crisis. I'd urge the GOP to consider doing their job as a party, not playing insane, destructive politics.

guest-ionssij in reply to Brantgoose1

Obviously, you guys in totalitarian land are unable to understand the concept of "individual freedom", but that's OK. It's like nonsense,


That's true in Canada, which, after all, it's still technically a colony of the Queen of Great Britain. The theory of government in the US is radically different and that's why totalitarians like you will never understand America. In the US, the rights belong to the individuals, not the "sovereign people" or anything like that. Those rights PREDATE government. And the governed, the people, decide which rights the government can meddle with and under which circumstances. It's the whole theory of "negative liberties" at core of the US which is very different from the theory of "rights derived from government" -be that government a monarch or "the people"- that pervades Canada and other Western European countries. In that regard, the US is exceptional. Our rights are ours, period. Philosophically speaking government not only does not grant rights but there are certain rights that it cannot take away unless the constitution is changed (which is very hard since 10% of the population strategically distributed across the US can block any constitutional amendment). That's why, no matter how much Obama cries, the US cannot take away freedom of speech or the right to bear arms. At the same time, the role of government, as understood by the founding fathers, is not that of a nanny state, as it is in Canada, but as a provider of the common defense and enforcer of rights like private property, freedom of speech, etc.

I know that plebeians like yourselves, this idea of free individuals pursuing their own dreams without government interference is alien, but that's what the US is all about. It's because your limited minds are unable to understand this that you find the legality of censorship fine (because that what's Canada's Commission for Human Rights does). Only the utmost ignorant can equate such censorship (which would not stand constitutional scrutiny in the US) with American hate crime laws. Let me help you here: a hate crime has to be a crime first. Ie, calling somebody a racist epithet in the US, no matter how disgusting, is not a crime. A hate crime is when you commit a crime against somebody (battery, murder, etc) AND it can be shown that it was racially motivated. Big difference that your small minds are unable to grasp.

Brantgoose1 in reply to guest-ionssij

What did I say about free speech in the USA? I am at a loss to understand how I am mistaken about a subject I do not recollect mentioning and can see no evidence of upon re-reading my post several times.

My post was almost entirely devoted to denying the common American conservative myth that Canada is socialist. I did not, as far as I can see, say anything about free speech.

You went off on a tangent about hate speech laws. Not me.

Legitimate free speech we have plenty of in Canada as well as the US. Since I was countering the myth of Canadian Socialism, the only relevance of free speech is to point that we do in fact have as varied a constitutional and legal guarantee of free speech as the US, conservative claims about restrictions on "free speech" in he form of anti-Semitism, racialism, etc., notwithstanding. However, I did not go that route.

Your reference to the Queen of Canada, nominally Head of State but not of Government, and not even acting Head of State when she is not in residence in Canada, betrays a common American misunderstanding of the role of the Queen in our constitution and government. This role is largely a figurehead position.

Calling Canada (and by extesion) totalitarian land is premature. Stephen Harper, the Conservative PM of Canada, hasn't gotten around to totalitarian government yet.

Calling me a "plebian" is too odd to be insulting. Whatever can you mean? We do not have plebians in Canada except in the minds of very, very silly snobs. There is no plebs in our constitution. There are no titles of nobility except those granted before Canadians were forbidden to accept titles or use them in Canada, a law modelled on the US precedent.

Canadian (and British) liberties existed long before the United States, and while they have been variously interpreted and legislated the same as in the US, the UK and elsewhere, I do not see that they are significantly less. For one thing, many of these political liberties are legislated by the States, Provinces, and Territories of Canada and the United States and thus vary from one place as well as one time to another.

Canada is not a socialist country. A socialist country is one where the workers own the means of production. Most of our means of production are owned by American corporations and a hand full of our own, plus some government-owned agencies and Quangos. We have a mixed economy and a federal system of government which is still a liberal democracy no matter how progressive legislation annoys our conservatives and yours.

As for my remarks on the Sovereign will of the people, I do not interpret this differently from many Americans or liberals. I mean pretty much the same thing as the statement that the government governs with the consent of the governed. I am not a rugged individualist or right wing or left wing anarchist. Individuals may vote, donate money or time to political parties, and engage in the political life of a country varously, but their effective action is almost always collective. It is rare that the opinion of a single individual sways a nation let alone a government. You have misconstrued this key point of my argument that Canada is not a socialist country. You are shadow-boxing with a straw man.


This is a fabricated crisis, not in the sense that it could have been avoided, but in that the idea that we face Armageddon because of a 2.4 decrease in the rate of growth of government (no cut sirs!) is going to be catastrophic for the American economy. It is not. The Economist is part of Obama's propaganda machine but even him toned down today. He has been painting a doomsday scenario that is not going to happen.

Gary Whaley

on sixty minutes Brenenki said he must raise interest rates and here he has only lowered rates creating a false economy.


Two words - USER FEES.
Why should non flyers pay for air traffic control? or vegetarians pay for meat inspectors? Why not shake down everyone coming into the States to pay for the border guard security service that ensures we aren't carrying a dirty bomb?
And while we're at it, why not charge out the cost of military bases to the countries where they are stationed? Presumably, those countries get a huge benefit from the presence of Uncle Sam's military, why else would they have them there? And when America goes to war to protect national interests, doesn't that usually mean corporate interests? A user fee from those corporations operating in the next country that America is about to invade will certainly help defray the cost of that war. I feel sure that those corporations would welcome the opportunity to participate. How else can America recover some of the 5% of GDP it spends on its military and security infrastructure? At the very least, the American military would get a good reading on the value of the service it provides to allied countries and American corporations if it requested user fees!

Duckdawdger in reply to timshel

Well, a semi-serious joke, yes. Perhaps if normal cost / benefit analysis including acceptable negotiated charge out rates were applied to the American military, the federal government might learn where the military service provides limited or no value.

timshel in reply to Orenv

True, I'd have to see the numbers on this, my inkling is that the majority of military spending is concentrated in the middle east, where our presence is not only unwelcome, but actively fought against on a daily basis.


Someone below made the comment that this is "much ado about nothing". And, when you put the size of the cuts into perspective, it seems to be just that. We can all be proud of our president and Congress who are doing exactly what they have been for the past 4+ years - absolutely NOTHING!

WELL SAID...Much ado about nothing. Obama has direct control over what services are cut, if any. Its time he manned up and at least acted like a leader. So far all he has been doing is campaigning for the Democrats to take over Congress in 2014 and blaming everyone else for his failures.

I wish for just once he would get off the perpetual campaign and actually lead. Maybe then we would get something done. Both the Democrats and Republicans are running around like chickens with their heads cut off rather than sitting down and even attempting to negotiate.

What a sad state of affairs we have.


Instead of Furloug's they should just cut everyone's pay by the same amount. Problem solved.

Rob S in reply to Kroneborge

If it were any privately run enterprise, it would first review all of the activities it was supporting. It would then cancel those that were of lower priority and ask the employees to search for jobs elsewhere in the organization. It would also ask all managers to review their reports and identify those who were "on probation" for not meeting job expectations. They would be terminated. Job openings would be available to those who had programs cancelled. Any employees who were unable to be placed after a month would be laid off.

A surgical knife that leaves the body functioning is better than a thousand pinpricks over the whole body. Most private organizations argue that the process leaves the organization healthier and better functioning than before. It requires, however, a belief that the organization exists for a purpose other than providing employment. That belief seems to be absent in government organizations.


The real catastrophe of the sequester is that entitlement reform -- the thing that truly is needed to ensure this nation's solvency -- is not part of the "sequester". In fact, they are (for the most part) fully protected. Only Medicare will take a slight 2% decrease, and that only for provider payments. The rest of the entitlements, well, the funds remain the same.

This in some ways makes the sequester worse of a hit than you'd think from the initial numbers. That $85 billion cut actually represents 8-10% of the "non-protected" departments. Not a catastrophe, no, but given that most of the protected departments are entitlements and interest payments, that should tell you something right there. (Cutting things like infrastructure and research by 8-10% while protecting our bloated entitlement systems? Seems like we're preparing for the future!)

I will not consider this nation ready for serious deficit reform talk, until the government spending alarmists stop talking about trifles like Michelle Obama's Oscar visit, and start talking about big ticket items like Social Security, Medicare, and Medicaid (*especially* the later two).

timshel in reply to soundwave106

Ok, so you cut Medicare and Medicaid (completely unnecessary btw), and shift more of the cost of healthcare onto seniors and the poor, which eats up even more of their stagnant/declining incomes.. further depressing the economy, further enriching a parasitic cartel of rentiers. How is that a solution?

The correct solution - reduce the Medicare eligibility age to zero. Single-payer system, destroy all the inefficiency, waste, and CEO profits of the private insurance cartel. Then our health costs won't be double that of any other developed nation. Maybe find some other projects to work on, that whole global warming thing perhaps, high speed rail system, education?

soundwave106 in reply to timshel

You are correct that it is less blind aggressive wholesale cuts I am talking about, versus wholesale reform of America's rotten medical system. Americans pay an awful lot of money for (relatively speaking) rather mediocre care. You don't need to cut anyone out of the system to save money on Medicare and Medicaid, in my opinion, at least in the short term. (The demographics still look a bit scary in the long term, but it would look a lot less scary if America's health care system wasn't so rotten.)

Orenv in reply to timshel

Or, adjust Medicare and Social Security eligibility ages to an number consistent with life expectancy at the time of their formation. Think about this, a person who was born in 1950 and stayed in school till they were 22 (4 yrs college) then works 40 years to age 62 and retires on social security can expect to collect it for 21 years (based on life expectancy). So this individual will work and pay into social security for less than half of their life. That person who was 62 in 1965 could expect to get paid for 12 years. Not only are there more people, but nothing is adjusted based on the FACT that people live (and presumably can work) 9 years longer! Instead we just get paid more and are asked less of.

It is a good deal till it is bankrupt.

timshel in reply to Orenv

Yes, all those cushy social security retirement packages, old people are really living like kings out there at the poverty line.

It is not bankrupt, and there is no possiblity of bankruptcy. The government can pay out whatever it feels like. I'm not going to waste time arguing over social security, it's a non-issue.

What IS an issue is our healthcare COSTS, and it has nothing to do with Medicare, and everything to do with the private insurance cartel. Shifting costs back onto seniors solves nothing. If you want to address the problem, then let's actually deal with it..

Orenv in reply to timshel

It has everything to do with medicare. Whom do you think sets the rates below which nobody is permitted to charge for services (even to cash paying customers). Medicare is just another insurance company, this one run by the government. Do you think for a minute that the people who run Medicare are not interested in money and power?

Nearly doubling the time that a person can receive benifits without increasing the costs is a way to increase costs (see both Medicare and Soc. Security). Of course we can just cut the payments, but as seen by the recent sequester cutting only 2% out of a budget increasing by 4%, there is no political will to make the tough choices. So what I am afraid will happen is we will wait till calamity to act.

We have a medical system where the receiver has no incentive to seek out value in treatment, private insurance, medicare, etc. Only the cash buyer has incentive (hence relatively low costs for lasik and cosmetic surgery..).

And BTW, people aged 55 and older are 35% of the population and hold 65% of the wealth. So many of them can afford to take care of themselves just like you and me are expected to.

timshel in reply to Orenv

The people who run Medicare?? Haha.. the administrative costs of Medicare are about 3-5%, this is known as the medical loss ratio - everything that isn't spent on actual medical care. The private insurers operate at around 15-20%, part of Obamacare was actually to regulate that private insurers run at least at 15% or below MLR. the VA is even better than Medicare, at around 1-2% MLR.

Medicare sets its rates based off of what private insurers charge, and they are still WAY below what private insurers charge.. for obvious reasons. There's nothing preventing United or Blue Cross from having lower rates than Medicare, except that they are grossly inefficient and wasteful business models and have to charge more just to remain profitable.

Check out, every other developed country has a single-payer, Medicare-for-all type program that operates at roughly half the cost of our entire healthcare system, if not less. It's pretty obvious when you think about it, on the one hand you have a government-run, non profit, simple healthcare system that determines its rates each year. Or, you can add in this massive, inefficient, profit-seeking middle man in the form of private insurers like we do in the US, who have no incentive to reduce costs, and every incentive to deny care and push as much cost onto the consumer as possible.

Orenv in reply to timshel

Yes indeed the people who run Medicare and the ones who determine how much gets paid for which procedure (which correlates closely with the ability of a particular profession to lobby for higher rates - much like everything else decided by Government - no surprise here).

Medicare overhead is calculated based on administrative cost divided by the total cost. However, the total cost is high because older people generally have higher medical expenses than the young. When the costs are viewed on a per-beneficiary basis, Medicare’s administrative costs are seen to be slightly higher than those of private insurance, even though in private insurance these costs include money spent on non-administrative functions such as marketing (see article Medicare’s ‘Efficiency’ By Robert Moffit & Alyene Senger).

"Medicare’s administrative costs also exclude the costs borne by health providers rather than the government. Medicare has complex regulations. Medical practitioners, under threat of civil and criminal penalties, must comply. A study by PricewaterhouseCoopers showed that hospital officials spent roughly a half-hour complying with Medicare paperwork for every hour of care." None of this is in the "medicare budget" but certainly is in the health care providers.

I am no fan of insurance companies. But they are playing with the cards as dealt (with the deck they created hand in hand with our politicians). IMHO routine medical care should not be covered by insurance since you are going to pay it anyway. You just inject overhead. It is like buying gasoline insurance to fill your car.

Perhaps you live in a country where the most efficient things are handled by Government, but I have not heard of this country. Single payer is not efficient for the same reason collective farms are not. It may appear "free" to the user, but it hardly is. In fact, once sick, your outcomes are MUCH better here in the USA. Here you live longer with chronic diseases, have more cancers cured, etc. These are just the facts. By no means to I believe our medical system is efficient, but it is the 3rd party payer system and obtrusive regulation that drive the costs.

And BTW, Medicare costs by law have to be the lowest cost. This is why many Doctors limit the number of medicare patients they will see because they often are not profitable (profits being what the Dr. makes after paying all their bills - i.e. their paycheck)

timshel in reply to Orenv

Outcomes are not as good, thats the problem. Our healthcare system is ranked in the 30's in terms of quality out of all countries, but it is number one in cost. I'm not here to debate this with you, these are the facts. I work with health insurance every single day and medicare is BY FAR the easiest to deal with (along w medicaid). There are no authorizations, no approvals, no physician consultations, no paperwork to deal with, there arent a thousand different convoluted plan types. I suspect you really have no first hand experience with this because everyone in the industry up and down (doctors, providers, etc) will tell u how awful it is. You're exactly right, it is the third party intermediaries that make our system so bad, a.k.a the enormous profit seeking private insurers.

Rob S in reply to timshel

Medicare and Medicaid now contribute to over 50% of the total health care cost. The overhead and profits for private insurance companies contribute 5%. Where is the money, timshel?

Orenv in reply to timshel

I will have to disagree on outcomes. Most of the statistics you see quoted are misleading in that they incorporate such things as infant morality and death from homocide which are higher in the US for many reasons. Infant mortality is higher because we count still born children as live births and other countries do not. Also, we have a MUCH higher teenage birth rate than most of the world. Teenagers have higher infant mortality overall. Also, we have MANY more murders in this country.

However, if you look at outcomes for chronic illness like cancer and diabetes (in other words, cases where medical treatment have direct effect), the US is better.

Companies need to make money to survive. But right now there is little incentive for the payer (being Government or private companies) to reduce costs as long as they can stick it to the rate payer (citizens or clients) with little if any push back. People complain, but keep on paying and many feel they have no choice (and probably don't).

If Medicare and Medicaide were such good deals to the Doctors, they would not take private patients. Instead they limit medicare patients, which tells me that they find them less profitable, and from what I hear from them, actually money losers.

timshel in reply to Orenv

Again, Medicare sets their rates based on estimated costs that doctors/providers have. It still ends up being on the low end because of the market power that Medicare enjoys. Now why might the costs be so high that insurers cannot match these prices? It might have something to do with the 15-20 cents of every healthcare dollar that gets wasted away on a parasitic, unnecessary middleman. It might have something to do with the entire departments and enormous staff that a doctor/hospital/provider must employ to deal with all the different kinds of insurance out there.

But yea, I'm sure you're right.. the US healthcare system is actually great, it's just the World Health Organization, Commonwealth Fund, Kaiser Foundation, and the empirical world of facts/observation that has got it wrong. Good day sir.


Sandy relief fund is 65 billion dollars extra spending, and this thing is only 42 billion in 2013.

Federal Reserve Bank is printing 85 billion dollar per month with 3 trillion in debt on the book already, more printing?

40 cents of every dollar Obama government spent is borrowed, with 16.5 trillion dollar Federal Government deficits already, Obama created more government deficits than all the previous presidents combined, more deficits?

If you add all the underfunded Medicare, social security, prescription drug, and all the credit card balance, student loans, state/county/city deficits, etc.... Every American is a negative millionaire already.... And Nancy Pelosi said spending is the problem?

Why Michelle Obama went to attend 'Oscar', spent millions of tax payer's money for the trip and security? Can we cut that?

Why provide free coffee and pastry for some departments?

Why we have union for government employee? A private company can file bankruptcy, government will only increase taxes?

What a sad joke!

timshel in reply to KACEY1

What an absurd cornucopia of nonsense you've posted here..

QE is an asset swap, as with all Fed operations it contributes nothing to the deficit or M2 money supply, and cannot do so.

If you project out all spending until the 3rd millenia we can come up with some really scary numbers, but it does us no good in terms of dealing with the economic reality around us. There is NO debt crisis.

The high levels of private sector debt are precisely the reason the government needs to run deficits. You cannot have both sectors of the economy deleveraging at the same time it makes no sense.

Free coffee and pastries, oscar night? Really, these are the spending problems you want to focus on? How about our monopolized health insurance cartel that incessantly rapes the whole country? How about the absurd cost of a college education these days?

Puntmeister in reply to timshel

The absurd cost of college education is a real issue that needs addressing.

Awhile back, there was an Economist article on the issue, if I remember correctly.

There is no easy way to tackle the issue, without some serious paradigm shifts.

The natural government response to unaffordable tuition costs is to provide low interest loans to students. The perverse effect, however, is that tuitions just go up as demand goes up - (it is common sense, as more students now can afford tuition, due to student loans - demand goes up, cost goes up).

The rub is this - the reality is, the bulk of college tuitions are paid for by the government, yet the government plays no role at all in the pricing of college tuitions. Instead of a standard two-party economic pricing model - with a producer and a consumer, you have a triad: Colleges (Providers), students (consumers), and government agencies (Payers). This model leads to perverse incentives in the pricing of the product.

A similar problem, albeit with many intricate differences, occurs with the health care provider, patient, insurance company triad.

Puntmeister in reply to timshel

Basically, the Federal government, which is subsidizing the bulk of college tuitions should be (and should have been for a long time running) spanking down the Universities.

Instead, Universities have had free reign to keep jacking up costs, much of which is of no direct benefit to students.

timshel in reply to Puntmeister

The healthcare problem I understand very well, because I work in the industry (sadly).. and I see the waste and inefficiency first-hand every day. Endless administrative hoops to jump through, authorizations, approvals, physician consultations, paperwork, financing, entire departments devoted to insurance at the providers offices, the doctors offices, the hospitals, and on and on it goes. Each year there is new legislation, new complications, new policies, more confusion added on the top. More employees needed to deal with the ever rising tide of b.s. and obfuscation.

The college problem I do not understand as well. I'd be interested if you had any numbers about the government provided tuitions. It is my understanding that states have paid for less and less of tuitions over the years, especially since the crash in '08. More and more cost has been shifted to the students, and colleges keep adding on more fitness centers, buildings, etc. to keep up with competitors. It is my (admittedly naive) idea that we can have a public option of sorts that is available for every high school graduate free of charge. Education is the single best investment we can make for the future. We don't need the most absurdly expensive new buildings and textbooks, we just need places where people can come together to learn at a reasonable cost.

timshel in reply to Puntmeister

That sounds like a pretty plausible explanation, these two issues should definitely be the top priority right now (along with jobs), but of course are nowhere to be seen in the national discussion.

Rob S in reply to Puntmeister

The loan program is a pass-thru to colleges and universities, using students as the vehicle for the transfer. The students may, coincidentally, receive some education in the process. It is more likely that they will waste four years (or even more likely, more) facilitating that transfer and then be dumped into the job market ill-equipped to earn enough money to complete the transaction and pay off the loan. But, no matter. The primary purpose of the program has been completed and the clients are pleased. The assumption that the government cares about tuition costs when they do everything possible to increase those costs is misplaced.

Puntmeister in reply to timshel

I don't know about free of charge - but costs of a more stripped down University, focused solely on classroom education, would certainly be much more reasonable.

Western Europe is a good place to look - Universities there are pretty much what we envision - buildings with classrooms, professors, a few offices, and not much else. Cost is free or close to free - government subsidies make them free, but without subsidies, the costs would still be much more reasonable than in the U.S. "club-med" University model.

Orenv in reply to Puntmeister

Paradigm shifts are needed, and are coming for this and many of our "intractable" problems (medicare, social security, etc). The real question is do we have the will to do it ourselves, or will we let the market do it to us (in a much rougher fashion). The piper always gets paid.


..and many believe in this Economistic Lotto. Keep books balanced in what ? Poverty in truth and imagination. Do you...?


I feel that we are lacking a "big picture" plan for the country.
At the moment we are transfixed on things that SEEM to matter: debt/deficit and spending/taxes. But we don't really have a grand plan, do we? Looking at everything that has been proposed, even Simpson-Bowles, I haven't seen anything that will address the key problem: a sluggish economy. If we can put the economy back on solid footing, many of our tax/spending, debt reduction problems will be far easier to handle.
Why can't legislation be enacted that allows pump-priming (debt to GDP ratio caused by WW II went over 100%, and that fixed the Great Depression) with a promise of debt reduction when the condition is right, such as setting an unemployment target, when reduction kicks in. In other words, why can't we do sequestration/debt reduction based on economic targets, not calendar deadlines? This seems far more sensible to me.


give me a break. Total government spending will still be higher than last year. What kind of spending cut is it that you spend more than did before by the end of it.

timshel in reply to Q5yjbhM9eB

There's this thing called inflation, actually.. so if you look at the dollar amount of spending year over year, yes it continually goes up. But as a % of GDP it has actually decreased since 2009 and is pretty much where it's been for the last several decades.

Rob S in reply to timshel

In reality government spending has CLIMBED over the last 60 years. In the 50's it was a mere 18%. By the 80s it had climbed to 23% and then dropped for 20 years, bottoming at 18% in 2002. In 2009 it skyrocketed to 25%, a postwar high. It is now slightly lower - 24%, far above the average over that period.

These trends have nothing to do with inflation.

timshel in reply to Rob S

The average since WW2 is about 20%/GDP, not to mention WW2 where it was in the 40's. 20% is right where it was in 2007/2008. Now what could have POSSIBLY caused government spending to go up around 2009?? Hmmmmmmmm...... it must be that "kenyan socialist" in the white house, couldn't have anything to do with that enormous financial crisis that triggers automatic spending increases in the form of unemployment benefits, food stamps, etc. Spending increases which - when/if the economy recovers - will be reversed.

To say that nominal government spending has gone up over time is about as helpful as mentioning that the price of an automobile or ketchup has increased over time.

timshel in reply to Q5yjbhM9eB

Yes, and the economy grows over time as well. This is why we use measures like debt/GDP or spending as % of GDP.. which as I mentioned in the other posts is decreasing, and is only at the levels it is at because of AUTOMATIC spending as a response to the largest financial crisis since the great depression.

Rob S in reply to timshel

I was only responding to your falsehood, "..and is pretty much where it's been for the last several decades." There has been a steady climb over 60 years, reflecting the increased role that the federal government plays in our economy.

Government spending today is still, five years later, far above the level it was when Obama took office, and far above the trend line. The projections have it increasing, not decreasing, due to expansion of government activity and growth in entitlement spending. Blaming Bush for Obama's policies is wearing thin, timshel.

Your original argument appeared to be based on the assumption that Spending/GDP somehow accounted for inflation. How much has the price of an equivalent car or bottle of ketchup increased, in 1950 dollars? The cost of government has gone up by 1/3.

timshel in reply to Rob S

Except there hasn't been a steady climb, the average has been 20% of GDP since WW2, which is right where it was before the crash. When you have a larger economy (more people, more businesses, etc.), the government spends at a higher amount.. that is not the same as the government being proportionally bigger, or having an "increased role".

Point me to where I blamed Bush for the crisis? In the Reagan years you had government spending at 22-23% of GDP, lets not turn this into an ignorant partisan shouting match. Projections show spending going down to 22% of GDP for the next five years, not increasing. Google "white house table 1.2" for the excel sheet.

Rob S in reply to timshel

Is the "white house" you refer to the one where the resident predicted that he would cut the deficit in half during his first term? It is? And I am supposed to take his projections seriously?

No thanks.



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