Martin Feldstein: The president has emphasized the importance of limiting services to "health care that works." To identify such care, he provided more than $1 billion in the fiscal stimulus package to jump-start Comparative Effectiveness Research (CER) and to finance a federal CER advisory council to implement that idea. That could morph over time into a cost-control mechanism of the sort proposed by former Sen. Tom Daschle, Mr. Obama's original choice for White House health czar. Comparative effectiveness could become the vehicle for deciding whether each method of treatment provides enough of an improvement in health care to justify its cost.
In the British national health service, a government agency approves only those expensive treatments that add at least one Quality Adjusted Life Year (QALY) per £30,000 (about $49,685) of additional health-care spending. If a treatment costs more per QALY, the health service will not pay for it. The existence of such a program in the United States would not only deny lifesaving care but would also cast a pall over medical researchers who would fear that government experts might reject their discoveries as "too expensive."
Free Exchange: The . . . problem with the argument by rationing is that it seems to ignore how resources are allocated in a perfectly free market—by willingness or ability to pay. . .
The nub of the matter is this—government can afford to provide basic coverage to everyone, but it can't afford to provide every treatment everyone may want to everyone who wants it. It must therefore decide how to limit its expenses, and it can leave open the option of using a private practitioner to those who are denied care based on a cost-benefit analysis. Or government can provide coverage to no one, and those who cannot afford a treatment—effective or not—will go without.
Mark Thoma: The goal of Democrats is to lower costs without sacrificing the quality of care (which will allow coverage to be expanded). Whether that's achievable or not is a legitimate point to debate, I think the experience in other countries suggests there's quite a bit of excess in the system that can be removed without affecting the quality of care people receive, but accusing Democrats of intending to cut the quality of care or to ration care within particular segments of the population (or overall) mischaracterizes what they are trying to achieve.
Visit msnbc.com for Breaking News, World News, and News about the Economy
| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| Glenn Beck's Operation | ||||
| ||||
. . . So the birthers, the anti-tax tea-partiers, the town hall hecklers -- theseare "either" the genuine grass roots or evil conspirators staging scenes forYouTube? The quiver on the lips of the man pushing the wheelchair, the crazed risk of carrying a pistol around a president -- too heartfelt to be an act. The lockstep strangeness of the mad lies on the protesters' signs -- too uniform to be spontaneous. They are both. If you don't understand that any moment of genuine political change always produces both, you can't understand America, where the crazy tree blooms in every moment of liberal ascendancy, and where elites exploit the crazy for their own narrow interests. . .
| The Colbert Report | Mon - Thurs 11:30pm / 10:30c | |||
| Glenn-Harried Glenn-Lost | ||||
| ||||
Interesting that Orrin Hatch (R-UT) voted for Ginsburg and Breyer--and against Sotomayor...Not only voted for, but suggested.
The ruling conservative faction still draws most of its support from such remote and religious strongholds . . .Why is this so often true, I wonder. Even in Albania, as I recall, the Communist party won the first free election in 1990-ish because of the rural vote.
But the quickening exodus of young villagers in search of jobs has challenged the traditional mind-set of residents of these communities. The young return on the weekends from nearby cities like Kashan and Qum, bringing back news of a changing world . . .
To Paul, the administration's health plan is simple and straightforward. To Keith, it is a nonstarter.
Why do these two smart commentators reach such opposite conclusions? The essence of the difference, I think, is that Paul is mainly concerned with universal coverage and is happy to put off discussion of the government budget constraint to another day, while Keith is focused on how the reforms will be paid for and, in particular, with the administration's claims that a major goal of health reform is to put the government on a more sustainable fiscal path.
The essence is really quite simple: regulation of insurers, so that they can’tcherry-pick only the healthy, and subsidies, so that all Americans can afford insurance.
Everything else is about making that core work. Individual mandates are a way to prevent gaming of the system by people who don’t sign up until they’re sick; employer mandates a way to hold down the on-budget costs by preventing a rush by employers to drop insurance; the public option a way to create effective competition and hold costs down further.
But what it means for the individual will be that insurers can’t reject you, and if your income is relatively low, the government will help pay your premiums.
That’s it. Any commentator who whines that he just doesn’t understand it is basically saying that he doesn’t want to understand it.
Here’s what Israelis need to understand: President Obama is not some outlier when it comes to Israel. His call for a settlements freeze reflects attitudes that have been building in America for a long time. For the last 40 years, a succession of Israeli governments has misled, manipulated or persuaded naïve U.S. presidents that since Israel was negotiating to give up significant territory, there was no need to fight over “insignificant” settlements on some territory. Behind this charade, Israeli settlers bit off more and more of the West Bank, creating a huge moral, security and economic burden for Israel and its friends . . .
For years, the Conference of Presidents of Major American Jewish Organizations and the pro-Israel lobby, rather than urging Israel to halt this corrosive process, used their influence to mindlessly protect Israel from U.S. pressure on this issue and to dissuade American officials and diplomats from speaking out against settlements. Everyone in Washington knows this, and a lot of people — people who care about Israel — are sick of it . . .
What about Mr. Obama? He has nothing to apologize for policy-wise. The president is working on a deal whereby Israel would agree to a real moratorium on settlement building, Palestinians would uproot terrorists and the Arab states would begin to normalize relations — with visas for Israelis, trade missions, media visits and landing rights for El Al. If the president can pull this off, it would be good for everyone.
MSNBC host Dylan Ratigan said Thursday morning that while President Barack Obama has “elevated the conversation” when it comes to health care, there’s a downside for cable executives and his fellow hosts: “Health care is bad for ratings.”
Discussing the previous night’s low-key news conference, Ratigan
said that “cable networks’ ratings go off a cliff” during the health care debate, which eventually “forces the conversation out of the TV.”. . . Fox’s decision not to air the presser paid off: The network won the 8 p.m. time slot with an episode of “So You Think You Can Dance.”
. . .
In trying to not get bogged down like President Bill Clinton in the ’90s, Obama decided to take the health care fight to a prime-time audience last week. But perhaps the biggest story coming out of the press conference had nothing to do with health care. Instead, it was Obama’s statement that the Cambridge, Mass., Police Department acted “stupidly” in its arrest of Harvard Professor Henry Louis Gates Jr.Yet, save for his emotional response to a question about Gates in the event’s final minutes, Obama got lukewarm reviews for his talking points on health care. “Snooze conference,” was the Philadelphia Inquirer headline; “Snoozer conference” was the verdict from MSNBC’s First Read.
After a three-hour meeting at the White House on Tuesday, fiscally conservative Democrats in the House of Representatives — the so-called Blue Dog Democrats — got a tentative agreement on an addition to the health reform bill. The new provision would give an outside panel of health policy experts and stakeholders the power to make cuts to government-financed health care programs.
Although brushed off by some as a “pint-sized breakthrough in an ocean of concern,” Peter Orszag, the White House budget director, called it “probably the most important piece that can be added” to the health care bill in the House.
I could not agree more. Such a provision, if part of the final bill, would be the proverbial camel’s nose under the tent for a more rational approach to America’s health policy.
It would be a very big deal . . .
"If the Department of Defense can't figure out a way to defend the United States on a budget of more than half a trillion dollars a year, then our problems are much bigger than anything that can be cured by a few more ships and planes," Gates said in a wry and sometimes stinging address to the Economic Club of Chicago.McCain looks to cut funding for more F-22 jets
Sen. John McCain wants to remove the $1.75 billion recently inserted into the proposed 2010 defense budget for more fighter jets from Lockheed Martin.
. . .
The extra money would extend production of the F-22 beyond the 187 aircraft that Defense Secretary Robert Gates says are needed.
Summary: Despite the lies the gay-marriage media tell you, the F-22 is freaking awesome!!!!!!!!! Plus I fear for my political life if cuts are made at Hill Air Force Base.
Wendell Potter has served since May 2009 as CMD's Senior Fellow on Health Care. After a 20-year career as a corporate public relations executive, last year he left his job as head of communications for one of the nation's largest health insurers to try his hand at helping socially responsible organizations -- including those advocating for meaningful health care reform -- achieve their goals.
Iranian twitterers are claiming victory in a coordinated series of blackouts during Ahmadinejad's televised speech yesterday:
The protesters had earlier pre-arranged a call for Iranians to plug in heavy power load household devices such as dryers, irons and toasters at 9:45pm local time, as Ahmadinejad's speech began. Online Twitter feeds claimed blackouts were achieved in East Tehran, Sari, Tabriz, Isfehan, Rodehen, Saghez, Lavasan, Ahvaz, Khoramshahr, Dezfol, Jahrom, Khomini Shahr, Shahin Shar, Folad Shahr, Kashan and some of Rasht.
Some sample tweets:
Iron Tactic tonight: Call for Black Out During Ahmadinejad Live at TV , Tehran Time 21.30...
Yes It Worked!
Ghazvin went in Black Out, People Chanting" Death to Dictator" on the roofs in many cities...
Explainin Palin: All of the Above? - Views I generally agree with concerning her motives for resigning.
Why (Some) Liberals Hate Sarah Palin - Best summary I've seen on the subject.
Sarah Palin (R, Asterisk) - Less good commentary in my estimation, but I have to post it because of my cultural bias for groups of three.
Very AwesomeMegan McArdle: Medicare's Mythical Administrative Cost Savings
Key quote: My critics will want me to explain why, then, Europe can do it cheaper. The answer is threefold. First, most European nations have better governance than we do--the American political system is a Public Choice disaster. Second, they pay people less money in a way that's hard to replicate here (and even if it wasn't, would be a one time savings that wouldn't check the rate of growth). Third, we're still driving quite a bit of product innovation. Our messy, organic, wasteful, unfair, irrational system allows experimentation, and they cherry pick the best results. If we stopped doing this, their system would stop looking so good.
Key quote: The bottom line: Low administrative costs are not to be confused with high administrative efficiency. In other words, administrators are not necessarily a deadweight loss to the system.
Key quote: I believe that the most sensible source of financing for universal coverage would come from reducing the expensive, regressive, and inefficient subsidization of employer-sponsored insurance. Scaling back the exclusion would be highly progressive and would have the added benefit of reducing the incentives for overinsurance and excessive health care spending. This win–win solution would ameliorate a fundamental flaw in our current system while raising the revenues required to cover the uninsured.
Key quote: Some critics contend that behavioral economists have neglected the obvious fact that bureaucrats make errors, too. But this misses the point. After all, wouldn’t you prefer to have a qualified, albeit human, technician inspect your aircraft’s engines rather than do it yourself?Boston Globe: Healthy examples
Key quote: Over the course of a month, I spoke to just about everybody I could find who might know something about these healthcare systems: Elected officials, industry leaders, scholars - plus, of course, doctors and patients. And sure enough, I heard some complaints.
But in the course of a few dozen lengthy interviews, not once did I encounter an interview subject who wanted to trade places with an American. And it was easy enough to see why. People in these countries were getting precisely what most Americans say they want: Timely, quality care.
A statement by the group, the Association of Researchers and Teachers of Qum, represents a significant, if so far symbolic, setback for the government and especially the authority of the supreme leader, Ayatollah Ali Khamenei, whose word is supposed to be final. The government has tried to paint the opposition and its top presidential candidate, Mir Hussein Moussavi, as criminals and traitors, a strategy that now becomes more difficult — if not impossible. . .
“This crack in the clerical establishment, and the fact they are siding with the people and Moussavi, in my view is the most historic crack in the 30 years of the Islamic republic,” said Abbas Milani, director of the Iranian Studies Program at Stanford University. “Remember, they are going against an election verified and sanctified by Khamenei.”
The problem is that while common sense requires transportation modes and spending to be targeted to the local environment, politics demands that federal programs spend everywhere [America is great . . . except for the South]. A serious high-speed rail project would forget about Texas and focus on saving hours in the Northeast Corridor. A rational transportation program would target money to the areas that have the most congestion. A smart transportation policy would recognize the wisdom of using our existing infrastructure more efficiently, with the help of congestion pricing, rather than building more roads. Unfortunately, wisdom seems to take wing whenever politicians start envisioning the shining splendor of fast trains.I tend to agree here. High-speed rail lines don't seem to make sense in many of the areas they've been proposed (such as Texas, as Glaeser points out). Trains in general don't seem to make much sense in America, given current levels of sprawl. I like the idea of bullet-train systems just as much as the next man, but America is not Japan. We may want America to be less car-dependent, but buying more trains absent other actions to discourage current building and driving habits won't change that.
Greenspan: No sensible policy could have prevented the housing bubble.This seems to be false. Maybe raising interest rates would not have done anything, but what about issuing a statement saying "It looks like there may be a housing bubble; stay away from mortgage derivatives."
Regulation is certainly one means the Fed had to that end, but Fed communication could have helped too. If Greenspan had, for example, told people to stay away from mortgages because they were toxic rather than implicitly encouraging them to invest in housing, things might have been different.
Or a carton of milk, or a loaf of bread.
Both George Will and Greg Mankiw basically argue that we don’t need a government role because we can trust the market to work — hey, we do it for groceries, right?
Um, economists have known for 45 years — ever since Kenneth Arrow’s seminal paper — that the standard competitive market model just doesn’t work for health care: adverse selection and moral hazard are so central to the enterprise that nobody, nobody expects free-market principles to be enough. To act all wide-eyed and innocent about these problems at this late date is either remarkably ignorant or simply disingenuous.
In a brief blog post on healthcare, Paul Krugman says that George Will and I are "either remarkably ignorant or simply disingenuous." I cannot speak for George, but I can attest that I am completely ingenuous. So I suppose I must be remarkably ignorant.
There is a lot of that going around lately. In an earlier post on the state of macroeconomics, Paul says, "Brad DeLong and I have been sort of tag-teaming the Great Ignorance which seems to have overtaken much of the economics profession."
What is going through Paul's head as he writes these posts? I suspect three things:
1. On the issue of macroeconomics, I think I understand Paul's point of view. He accepts the 1970-vintage Keynesian economics he first learned from, say, Jim Tobin when Paul was an undergraduate at Yale. Like Tobin and Bob Solow, one of his teachers at MIT, Paul thinks a lot of modern macroeconomics was an unfortunate turn in the wrong direction. In this old paper (published version), I tell the story of modern macro and describe how many old Keynesians such as Solow were more likely to denigrate modern macroeconomics than to engage it intellectually. Paul is following in that tradition.
2. On the issue of health care, I also think I understand Paul's point of view. He would like a single-payer system, and he views a public option as a Trojan horse to achieve that goal. In my column, I wrote, "for those who see single-payer as the ideal, a public option that uses taxpayer funds to tilt the playing field may be an attractive second best. If the subsidies are big enough, over time more and more consumers will be induced to switch." Paul was one of the people I had in mind (see this old post of his).
In his latest post, Paul writes, "the standard competitive market model just doesn’t work for health care: adverse selection and moral hazard are so central to the enterprise that nobody, nobody expects free-market principles to be enough."
In my view, these comments are just off point. The Obama administration says it wants a public insurance plan that will compete on a level playing field with private plans (that is, without taxpayer subsidies). Is there any cogent economic analysis that suggests that such a policy addresses problems of adverse selection and moral hazard? None that I know. If it has to stand on its own financially, the public plan has no special advantage in addressing these issues.
In any event, it is not like the only alternatives available to us are a government-run health insurance plan or unregulated laissez faire. The most intriguing proposal in the current policy debate is the Wyden-Bennett bill (see this David Brooks column or this letter from CBO on the proposed legislation). That seems to be the best hope for truly bipartisan healthcare reform. At this point, given the legislative strategy of Congressional leadership, the hope is slim at best.
3. On the issue of tone, I again think I understand Paul's point of view. He likely believes that civility is overrated. He seems to think that in the blogosphere, and perhaps in the public debate more generally, you score points simply by insulting your intellectual adversaries. Sadly, I am afraid he may be right.
Two things are going through Paul's mind:
That at least since Kenneth Arrow weighed in on the subject... generations ago, there has been a consensus among health economists that adverse selection and moral hazard make properly structuring health-care markets very hard and very tricky, and that even if you do many of the usual benefits of market mechanisms are greatly attenuated in the health sector.
He reads what Mankiw is writing right now--for example: "The Pitfalls of the Public Option in Health Care: [Obama's] economic logic regarding the public option is hard to follow. Consumer choice and honest competition are indeed the foundation of a successful market system, but they are usually achieved without a public provider. We don’t need government-run grocery stores or government-run gas stations to ensure that Americans can buy food and fuel at reasonable prices..."--and he doesn't find any recognition that information and selection problems that are not present in grocery or gasoline markets are of the essence in the health care sector.
The economic logic behind a public plan springs from these information and selection problems. Private health-insurance companies are currently spending a fortune in a negative-sum game by which they try to make other private companies and not themselves actually pay for treating sick people. A public plan run by bureaucrats would not face those incentives, and would not waste money in that way. A public plan would, however, have its own inefficiencies: it would be run by bureaucrats, and would waste money in other ways.
Which set of inefficiencies would be greatest? We don't know. The argument for a public plan is that we should be like the mongoose Rikki-Tikki-Tavi, whose motto is: "run and find out." We should set up a public plan, let it compete with the privates, and see if it can provide care people like more cheaply than the private insurance companies. Friedrich Hayek would approve: the idea is to use the market as an institutional discovery mechanism.
The arguments against a public plan are two:
It would be able to provide people with better health care more cheaply, and would drive the private-insurance companies out of business, and their executives would lose their jobs and be sad, and their shareholders would lose their money and be sad, and their lobbyists would lose their jobs and be sad, and their tame legislators would lose their campaign contributions and be sad.
Mankiw's argument that a public plan will inevitably receive large and wasteful federal subsidies no matter what the initial law says.
The exammple Mankiw uses to back up his argument seems to me to be very strange. It is: "Fannie Mae and Freddie Mac, the mortgage giants created by federal law, were once private companies. Yet many investors believed--correctly, as it turned out--that the federal government would stand behind Fannie’s and Freddie’s debts..." and thus provide them with a subsidy.
There is a problem with this argument.
The problem is that in the past year and a half the Federal government has stood behind the debts of not just Fannie and Freddie, but AIG, Bear Stearns, Merrill Lynch, Bank of America, Morgan Stanley, and Goldman Sachs--none of which bear any resemblance whatsoever to a "public plan." The government has stood behind Fannie and Freddie not because they were, before 1968, public enterprises but because they were--like AIG, Bear Stearns, Merrill Lynch, Bank of America, Morgan Stanley, and Goldman Sachs--too big to fail. The Treasury staff would have loved to have let Fannie and Freddie default on their bonds had they not feared the systemic consequences.
The fact that Mankiw can't find an example of his argument (2) makes me think that it is very weak, and that the real reason people oppose the public plan is (1).
| The Daily Show With Jon Stewart | Mon - Thurs 11p / 10c | |||
| Reza Aslan | ||||
| ||||
My wife tried to tell me the other day that she had just ‘saved’ us money by buying on sale a couple of things for which we have no earthly use. She then proceeded to tote up all our ‘savings’ from said purchases and gave me a figure that represented the money we had generated, which we could now spend . . .she had me going for a minute.
I mention this because I have similar problems with the way President Obama hopes to pay for the huge and costly health reform package he has in mind that will cover all Americans; he is counting on the “savings” that will come as a result of investing in preventive care and investing in the electronic medical record among other things. It’s a dangerous and probably an incorrect projection.
Prevention of a disease, we all assume, should save us money, right? An ounce of prevention . . . ? Alas, If only such aphorisms were true we’d hand out apples each day and our problems would be over.
[. . .]
[I]f your preventive strategy is medical, if it involves us, if it consists of screening, finding medical conditions early, shaking the bushes for high cholesterols, or abnormal EKGs, markers for prostate cancer such as PSA, then more often than not you don’t save anything and you might generate more medical costs.
[. . .]
[D]octors, hospitals, pharmacists, drug companies, nurses, home health agencies, and so many others—are drinking at the same trough which happens to hold $2.1 trillion, or 16% of our GDP. Every group who feeds at this trough has its lobbyists and has made contributions to Congressional campaigns to try to keep their spot and their share of the grub. Why not?—it’s hog heaven. But reform cannot happen without cutting costs, without turning people away from the trough and having them eat less. If you do that, you have to be prepared for the buzz saw of protest that dissuaded Roosevelt, defeated Truman’s plan and scuttled Hillary Clinton’s proposal.
[. . .]
We may not like it, but the only way a government can control costs is by wielding great purchasing power to get concessions on the price of drugs, physician fees, and hospital services; the only way they can control administrative costs is by providing a simplified service, yes, the Medicare model (with a 3% overhead), and not allowing private insurance to cherry-pick patients (some of them operating with 30% overheads, the cost passed on to you).
Contrary to what we might think, comparative studies show us that the US when compared to other advanced countries, does not have a sicker population: we actually use fewer prescription drugs and we have shorter hospital stays (though we manage to do a lot more imaging in those short stays—got to feed the MRI machines). The bottom line is that our health care is costly because it is costly, not because we deliver more care, better care or special care. Alas, a solution that does not address the cost of care, and negotiate new prices for the services offered will not work; a solution that does not put caps on spending and that instead projects cost-savings here and there also won’t cut it. Leaders have to make tough and unpopular decisions, and if he is to be the first President to successfully accomplish reform there does not seem to be much choice: cut costs.
The Iranian government must understand that the world is watching. We mourn each and every innocent life that is lost. We call on the Iranian government to stop all violent and unjust actions against its own people. The universal rights to assembly and free speech must be respected, and the United States stands with all who seek to exercise those rights.
As I said in Cairo, suppressing ideas never succeeds in making them go away. The Iranian people will ultimately judge the actions of their own government. If the Iranian government seeks the respect of the international community, it must respect the dignity of its own people and govern through consent, not coercion.
Martin Luther King once said - "The arc of the moral universe is long, but it bends toward justice." I believe that. The international community believes that. And right now, we are bearing witness to the Iranian peoples’ belief in that truth, and we will continue to bear witness.
I know it’s a tough competition, but this just might be the most hypocritical thing I’ve seen in the past year:
On Monday, Sens. Jon Kyl (R-AZ), Mitch McConnell (R-KY), and Pat Roberts (R-KS) introduced the “Preserving Access to Targeted, Individualized, and Effective New Treatments and Services (PATIENTS) Act of 2009,” a new bill prohibiting Medicare or Medicaid from using “comparative effectiveness research to deny coverage.”
How bad is it? Let me count the ways.
1. Politicians who rail against wasteful government spending are taking action to prevent the government from reining in … wasteful spending.
2. Politicians who warn that the burden of entitlements is killing the federal budget are stepping in to block … the single most painless route to reducing the growth of entitlements.
3. They’re doing it in the name of avoiding “rationing of health care” … but they’re specifically addressing taxpayer-funded care. If you want to go out and buy a medically useless treatment, Medicare won’t stop you.
4. These same politicians are, of course, opposed to efforts to expand coverage. In other words, it’s evil for government to “ration care” by only paying for things that work; it is, however, perfectly OK, indeed virtuous, to ration care by refusing to pay for any care at all.
I'd say we have substantial empirical evidence that we are not going to control the health care cost inflation which is busting Medicare's budget, much less the new costs the administration is planning to add. We have been trying to control health care costs since the 1970s made it clear that Medicare was going to get really, really expensive. And any idea that you care to name, from comparative effectiveness research to healthcare IT to preventive medicine . . . these have all been on the table for more than thirty years, under one name or another. They haven't happened.
I'm startled by the wave of support for Ahmedinejad by American neocons like Marty Peretz ("Maybe the regime fiddled around a bit with the numbers at the polls and after the polling. Still, the outcome had a sense of authenticity.") and Martin Rubin. Maybe if there's regime change, and the Iranians liberate themselves, then the neocons won't get their holy war with Iran, and we won't get to liberate the Iranians by killing zillions of them. A great disappointment, to be sure.
UPDATE: The neocons aren't all speaking with one voice, it seems. Bill Kristol now demands that Obama immediately issue a statement of support to the protestors. Why? Because Hitler invaded Poland in 1939! (No, really! Read it yourself!) Ahmadinejad is Hitler! Obama is Chamberlain! So I guess Kristol's idea is for Obama to support the protestors, Ahmadinejad to denounce them as American puppets and kill them, and then we still get to invade Iran! Yay!
"If you ask an officer here [at the U.S. Military Academy] for career advice," says Andrew (A.J.) Pulaski, the 2009 class president, "they say the first thing you need to do is get out there and get deployed. Because pretty soon the war's going to be over, and you won't have that legitimacy, being an officer—like the only one in the Army—that hasn't served."And more troubling:
"Most of America seems to have forgotten we're still at war," he says. "I hope this reminds people that we're still here. After all, when Rome forgot her legions, her legions forgot her."
Staff Sgt. Shaun McBride would rather be in a war zone than at home. He likes the adrenaline, he says, even the "fear someone can shoot you." He hates the petty responsibilities of home life, the bills and family issues.
We are a warlike people . . . When enemies rise up, we commit vast resources to the fabrication of gods of stone and steel—ships, planes, missiles, fortifications—and depend on them for protection and deliverance. When threatened, we become antienemy instead of pro-kingdom of God; we train a man in the art of war and call him a patriot, thus, in the manner of Satan’s counterfeit of true patriotism, perverting the Savior’s teaching:
“Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you;
“That ye may be the children of your Father which is in heaven.” (Matt. 5:44–45.)
[T]raditionally, the U.S. government ran significant budget deficits only in times of war or economic emergency. Federal debt as a percentage of G.D.P. fell steadily from the end of World War II until 1980. But indebtedness began rising under Reagan; it fell again in the Clinton years, but resumed its rise under the Bush administration, leaving us ill prepared for the emergency now upon us[. . .]
The increase in public debt was, however, dwarfed by the rise in private debt, made possible by financial deregulation. The change in America’s financial rules was Reagan’s biggest legacy. And it’s the gift that keeps on taking.
Reagan-era legislative changes essentially ended New Deal restrictions on mortgage lending — restrictions that, in particular, limited the ability of families to buy homes without putting a significant amount of money down.These restrictions were put in place in the 1930s by political leaders who had just experienced a terrible financial crisis, and were trying to prevent another. But by 1980 the memory of the Depression had faded. Government, declared Reagan, is the problem, not the solution; the magic of the marketplace must be set free. And so the precautionary rules were scrapped.
Together with looser lending standards for other kinds of consumer credit, this led to a radical change in American behavior.
We weren’t always a nation of big debts and low savings: in the 1970s Americans saved almost 10 percent of their income, slightly more than in the 1960s. It was only after the Reagan deregulation that thrift gradually disappeared from the American way of life, culminating in the near-zero savings rate that prevailed on the eve of the great crisis. Household debt was only 60 percent of income when Reagan took office, about the same as it was during the Kennedy administration. By 2007 it was up to 119 percent.
Posts
All Comments
