Tyler Cowen has some comments on the ObamaCare chatter
. . . the “war” is the joint view — extremely common in America — that a) tax revenues are on an acceptable track, and b) we should spend more and more on health care each year at high rates, including in per capita terms.
If you think that dual project is sustainable, you may be relatively interested in estimates relative to baseline. If, like me, you think that project is like a failed and failing war, a success “relative to baseline” won’t much impress you. In fact it may scare you all the more to hear about success relative to baseline, as that can be taken as a signal that there is no really good plan behind the scenes. Here are a few factors which could radically upset current mainstream baselines:
Its not immediately clear to me what these two paragraphs mean exactly, but off the cuff I don’t know who the folks are who think that current tax revenues combined increasing health care spending is sustainable.
There are certainly people who don’t think about it much, that probably constitutes the bulk of society. Then there are people like me who think that sustainability is not an important consideration. Well, that’s probably just me, but I think I am slowly winning converts.
However, the mass of the chattering class is constantly talking about the need to reign in health care costs and/or reform the tax code, often with an eye towards more revenue.
Perhaps more interesting to me is this point by Tyler
Imagine people sitting around in Spain, in 2006, debating various scenarios relative to the “baseline budget.” Maybe that’s America today, though we do not face the same particular problems or timing that Spain did.
This sounds like a point I would make. Doesn’t this reveal not only the asininity of this entire exercise but the deep foolishness in thinking that responsible and prudent action will save you from being royally screwed. After all, Spain had not only a low budget deficit but was running a strong surplus. They were a prime example of a good little European citizen. And, now here they are on the verge of destruction and being pressed into ever worse policies by the European elite.
My growing sense is that in their heart of hearts most people just can’t accept that the world is fundamentally unfair. They think there must have been something that could have been done to prevent this badness. If only . . .
If only nothing in many cases. You were just screwed. That is life.
If you want to get out with your head intact then the question is not how to be responsible but how to survive a crisis. When you are engulfed in flames – and you will be – what do you do?
This is why if there is any lesson from all of this it is to point out how fantastically awful the ECB’s management of the crisis has been. Will this stop policy makers from screwing up similarly in the future, of course not.
The hope is that we will know who to hang, and that we can proceed with the hangings in short order. That is the way out.
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Tuesday ~ April 17th, 2012 at 12:58 pm
curtd59
1) Conservatives have a more accurate view of human nature. They have a more complex view of human nature. That view results in a more skeptical view of human nature.
All ‘liberal’ progress has been the result of adding women to the voting pool, the decline in male participation in all facets of society due to legislation, the south’s reintroduction into the republican party causing polarity, immigration, and migration. It has not been due to a change in preference. And the behavior of new generations is cyclical, not directional.
We must govern with the humans that we have, not the humans we wish we had.I know you find it antithetical, but the conservative case is playing out.
This is why conservatism is anti-ideological: all ideologies are progressive.
2) Conservative forecasts are playing out, not because they win arguments but because their understanding of human nature is true:
a) Differences in preferences are genetically determined. Differences in strategy have costs to individuals. Individuals resent those that do not pay such costs. Evolution has guaranteed this resentment is necessary and unavoidable. Without it cooperation is not possible, because cheating is more advantageous in the short run.
b) Group differences in signaling are biological and inescapable. Differences in signal costs mean groups biologically aggregate, and vote in support of aggregate signals. The signaling economy is of higher value to individuals in groups than is the monetary economy. (This is one reason why Islam is poor and Christendom is wealthy, and why christianity is an outlier: the church — the federal government — managed to break familial and tribal bonds. islam could not create a high trust society, and without it, an adaptable bureaucracy, or modern commercial capitalism.)
c) There is a point of minimum homogeneity, beyond which people will cease pursuing redistributive ends. The only countries that can avoid those issues are ‘privileged’ countries like canada and the north of europe, which are small, homogenous, and surrounded by a lack of competitive pressures. The states can never get there.
3) You can have the world you want in a homogenous nation state. But you cannot have it outside of “Denmark”. Participatory government is for small states. In those states the size also limites the distortive ability of the state, so that civilization-ending, or revolution inducing bubbles are more quickly visible.
Your counter argument, which you’ve stated here many times, is that authoritarian governments can achieve these ends. And that is true. And I know that’s what you prefer. But they can also achieve many other ends. And the people in them drop adherence to the high trust society as a way of creating a black market, and a means of rebellion against their ability to enact those ends.
You will either have an unequal society because of market meritocracy, or an unequal society because of rebellion against state manipulation of societies’ tendency toward meritocracy. That is, unless you produce societies of people who are homogenous equals in practice. Whether by Harrison-Bergeron dysgenics, or natural and or technical eugenics.
Now that’s a comforting thought. :/
You are a wonderful human being. But trying to teach a pig to sing wastes your time and annoys the pig. (I know, I know, it doesn’t stop me either.)
Perhaps you were too selective in your reading of Smith, without spending equal time on his Moral Sentiments?
Or its modern equivalent by Jonathan Haidt? Or its earlier equivalents in Weber, Pareto and Machiavelli? Or Michel’s iron law of oligarchy? I know. I know. I know… The austrians have been silly in their belief in the rational individual. But they’re no sillier than the Keynesian belief in the egalitarian individual. We are attracted to the methods that support our cognitive biases.
Cheers
Tuesday ~ April 17th, 2012 at 5:42 pm
Lord
Which conservatives are these? Those that believe price rationing is the only route or those that don’t want government to touch their medicare? The conservatives that have a more realistic notion of human nature or those that have a more realistic notion of what that human nature does and will demand?
Tuesday ~ April 17th, 2012 at 1:21 pm
Teasing Karl Smith: The Futility Of Teaching Pigs To Sing | Capitalism v3
[...] neurons. In response to yet another of the Krugman/Smith/Thoma/DeLong fits of exasperation over the systemic failure of federalism, I try to encourage Karl to become enlightened – which I realize is as futile as his [...]
Thursday ~ June 7th, 2012 at 3:12 am
Shuvo
Thanks for the sensible crqtuiie. Me & my neighbor were just preparing to do some research on this. We got a grab a book from our local library but I think I learned more clear from this post. I am very glad to see such excellent info being shared freely out there.
Tuesday ~ April 17th, 2012 at 1:56 pm
Th
My objection is that Cowan and most people think of Obamacare as a government budget issue and not a total expense for Americans issue. If we all pay higher taxes to the government and receive health care for less than we pay now, our income to spend on other things has increased and vice versa. The only “baseline” I care about is total expenditures for health care including administrative costs with everyone covered.
Looking at costs as Cowan does makes as much sense as saying you had rather have separate checks of $20 each than figure out a $60 bill between you and your 3 lunch guests on your own. Health care cost is sustainable or not irregardless of where we arbitrarily set our tax rates.