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Robert Samuelson And The “Serious Trickle Down Fairy”

I am having a problem with a word, it is one that we’re hearing a lot lately, seriousness. Now having been ‘round the block a few times I have come to the conclusion that when I hear Right Wing talkers like Robert Samuelson and Republicans using a word over and over then I tend to think they are in the process of redefining it.

Today’s little nugget of nothing from Samuelson is all about the false equivalence between the supposed lack of seriousness on both sides. Of course La Samuelson goes after the Dems first insisting that we look at cutting entitlement programs like Medicaid and Medicare and then conflating those two expensive and troubled programs with the much more solvent and non-deficit producing Social Security.

He does take a half hearted swipe at the Republicans and their abject failure to even consider increasing taxes at all to bring down our deficits. But Samuelson has a point that he wants to make in this “A pox on both your houses” column. Here, I’ll let him make it:

Our budget problem is conceptually simple. Government’s spending commitments, driven by more retirees and uncontrolled health costs, vastly exceed the existing tax base. There is an argument about how fast changes should be made to protect the economic recovery.

He is right as far as he goes. The problem is that Samuelson is not really, um, err, serious about this issue himself. Yes we do have a problem that we don’t have enough money for our commitments and yes health care costs are going up and that is squeezing the budget more as we keep our commitments to the poor and elderly to provide them with health care.

However, the solution is not finding a way to slash these programs so that they provide less care and do nothing to control costs. The solution is to fix the underlying problem, that our health care markets are fundamentally flawed.

Budget Committee Chair Paul Ryan and, since the vote on Friday, the entire Republican House caucus, have a plan that would push Medicaid into the private market. They trumpet the idea that there will be more “choice” and that will allow senior citizens better care. This is a fallacy for a lot of reasons but the biggest is this; more than 80% of the insurance markets in the United States are what the Commerce Department calls “highly concentrated” this means that one or more companies control 40% or more the market. Generally there are two that take up more than 90% so there is no real choice there, at any cost.

The United States pays more for health care than any other nation in the world, and it does not cover all its people. Part of the reason for this is that our major programs like Medicaid and Medicare and the VA are forbidden from using their buying power to negotiate lower drug costs.

All of these are problems that go away with single payer health care. Any “serious” plan that deals with medical entitlements has to address this issue of cost containment through lower system wide costs. The increases in Medicaid and Medicare cost are do in great part to the fact that medical care in general is on an upward spiral, because that makes more money for the insurance companies. Until that ends the costs will continue to rise.

On the over end of the equation, there is the whole issue of revenue. The Unites States has backed itself into a position where it collects less revenue as a percentage of GDP than most of the industrialized world. Only Australia collects less. Just take a look at this chart:

Screen shot 2011-04-15 at 1.12.04 PM

We have to change this. Samuelson makes the head fake of talking about taxing the rich more, which we should do, but we must also stop providing tax subsidies for companies making billions of dollars. I have no problem trying to spur innovation and development in the United States, but I think that any company that can afford a dividend should not be able to collect a tax break.

Just by capturing some of the billions that don’t get from companies like GE or Exxon Mobile we will have more money to spend on funding our nation. We are paying the lowest taxes since the 1950’s yet we need money for things like schools and roads and frankly jobs.

Mr. Samuelson will tell you that we must cut programs that will affect the elderly and the poor and that it is “serious” to talk about taking the social safety net apart. While that might play well inside the Belt Way where people actually pay attention to horse crap like that, it is not a good prescription for our nation.

As unhappy as the president’s deficit reduction plan makes me, it is not about ending Medicaid and Medicare. It is not about giving tax breaks to the wealthy by cutting spending on the poor. And yes it does raise taxes, probably on everyone. That is something that is needed as well. A return to Clinton era tax rates may squeeze the middle class and the poor somewhat, but there is a need right now to bring in money to pay for the programs that offset this need.

I think that I am going to keep having a problem with the word “serious” especially from people who insist that the failed trickle down theory of economics will work if we just clap harder and cut taxes more. I don’t take my 7 year old nephew seriously when he tells me he believes in Tinkerbelle, I see no reason to do so for Robert Samuelson, Paul Ryan or any of the Republicans when they tell me they believe in the “Trickle Down Fairy”.

The floor is yours.

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Bill Egnor

Bill Egnor

I am a life long Democrat from a political family. Work wise I am a Six Sigma Black Belt (process improvement project manager) and Freelance reporter for Govtrak.org

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