Personal Accounts–for Medicare
Last night, Newt Gingrich praised the Chilean Social Security system, which allows workers to save for their retirements in personal accounts, rather than contribute to the government pension scheme. Several of my Cato colleagues are far more qualified than I am to comment on that system, including Mike Tanner, Jagadeesh Gokhale, and Jose Pinera–who designed and implemented it. But personal accounts are as important for reforming compulsory health insurance schemes like Medicare as they are for reforming compulsory pension schemes.
In 2010, I traveled to Chile to deliver an address to the International Federation of Pension Fund Administrators (FIAP). I detailed the harms caused by compulsory health insurance schemes and explained how personal medical accounts would improve health care and generate wealth even for the poor:
In designing health care markets, perfection is not an option. Under any system, whether state-run or the free market, some patients will inevitably fall through the cracks.
Personal medical accounts can help fill in those cracks by enabling innovations that improve medical care and bring it within reach of the poor. Yes, some will not earn enough to provide for themselves. And when we are free to make our own decisions, a small number of people will make poor decisions. I believe we have a moral duty to care for patients who could not or would not provide for themselves. Personal medical accounts will make it easier for us to meet that moral duty.
Under compulsory health insurance schemes, those cracks widen, and more people fall through. Price and exchange controls block innovation. Governments waste resources on low-value medical care. Some would describe these as the unavoidable costs of creating an equitable society. But those wasted resources do not purchase solidarity. They purchase sickness and poverty.
FIAP turned my address into this book chapter, which also explains how to craft a system of personal medical accounts.
For current enrollees, who have not built up savings in a personal medical account, Congress should make Medicare look more like Social Security. That is, the government should subsidize Medicare enrollees by giving them cash, rather than creating a complex health-insurance scheme that effectively lets government officials shape the entire health care sector.
Filed under: Cato Publications; General; Government and Politics; Health Care
Truth Is Stranger Than Fiction, Gingrich Division
Roger Pilon has been doing good, quick work on New Gingrich’s pronouncements on the role of the judiciary in interpreting the Constitution. (Roger read Newt’s 54-page “white paper” so you don’t have to!)
I have nothing to add to that assessment of the former House Speaker’s legally questionable and politically unwise views. Instead, I want to share a snippet from this lighter take by Mark Steinberg:
The Supreme Court today held that the United States Congress is unconstitutional and must vacate the Capitol no later than January 1, 2012.
The 8-1 vote followed closely on the heels of statements by Newt Gingrich, now leading the race for the GOP presidential nomination, that as president he would ignore decisions by the courts if he was having “a really bad day”; that Congress should have the power to subpoena and impeach federal judges whose jibs the legislators found un-seaworthy; and that the judiciary is “a twig on the governmental tree that the president and Congress can prune and burn in the backyard.”
The piece reads like something from The Onion.
Funny, when I heard that Gingrich was discoursing on the law, I thought he’d be proposing the appointment of sentient robots to be our judicial overlords…
Happy Holidays, everyone!
Gingrich Agonistes
Today POLITICO Arena asks:
Can Gingrich rein in “judicial activists”?
My response:
As I wrote in the Daily Caller a week ago, Newt Gingrich’s attack on the judiciary in chapter nine of his 21st Century Contract with America is a mass of constitutional confusions. It’s a direct assault on judicial review and on “judicial supremacy,” in particular — the idea that it falls to the courts to say what the law is. Newt would have us believe that that idea was invented by the Supreme Court in its 1958 decision in Cooper v. Aaron, where a unanimous Court told Arkansas officials resisting a school desegregation order that they couldn’t “nullify” a Court decision. But the power of courts to say what the law is far predates that decision. It’s implicit in our written Constitution with its independent judiciary. It was discussed explicitly and at length in the Federalist Papers. And it was secured by the Court in 1803 in Marbury v. Madison.
Newt Gingrich and the EMP Threat
The front page of yesterday’s New York Times features a story on Newt Gingrich’s “doomsday vision:” an attack over the United States’ airspace known as an electromagnetic pulse, or EMP. Gingrich and a cadre of concerned national security analysts worry that terrorists or rogue states—Iran and North Korea—could detonate a nuclear device over the United States that theoretically could disrupt electrical circuits, from cars to power grids.
The Times does a commendable job of questioning Gingrich’s arguments and whether this is a legitimate national security concern. Despite the fact that a “National EMP Recognition Day” exists, the threat is in fact very, very low. But it may be unfortunate that such extravagant doomsday scenarios get placed on the front page of the Times.
I addressed the EMP threat in my 2010 book Atomic Obsession and I included a discussion of the views of Stephen Younger, the former head of nuclear weapons research at Los Alamos National Lab, as forcefully put forward in his 2007 book, Endangered Species:
Younger is appalled at the way “one fast‑talking scientist” managed in 2004 to convince some members of Congress that North Korea might be able to launch a nuclear device capable of emitting a high‑altitude electromagnetic pulse that could burn out computers and other equipment over a wide area. When he queried a man he considers to be “perhaps the most knowledgeable person in the world about such designs” (and who “was never asked to testify”), the response was: “I don’t think the United States could do that sort of thing today. To say that the North Koreans could do it, and without doing any testing, is simply ridiculous.” Nevertheless, concludes Younger acidly, “rumors are passed from one person to another, growing at every repetition, backed by flimsy or nonexistent intelligence and the reputations of those who are better at talking than doing.” [Emphasis in original.]
The 2012 presidential election should certainly contain a legitimate discussion of national security issues. But I don’t think it really needs to include a lot of breast-beating about the EMP “threat.”
Who’s Right on Medicare Reform, Ryan and Rivlin or Obama and Gingrich?
This new video, narrated by yours truly, discusses a proposal to solve Medicare’s bankrupt finances by replacing an unsustainable entitlement with a “premium-support” system for private insurance, also known as vouchers.
This topic is very hot right now, in part because Medicare reform is included in the budget approved by House Republicans, but also because Newt Gingrich inexplicably has decided to echo White House talking points by attacking Congressman Ryan’s voucher plan.
Drawing considerably from the work of Michael Cannon, the video has two sections. The first part reviews Congressman Ryan’s proposal and notes that it is based on a plan put together with Alice Rivlin, who served as Director of the Office of Management and Budget under Bill Clinton. Among serious budget people (as opposed to the hacks on Capitol Hill), this is an important sign of bipartisan support.
The video also notes that the “voucher” proposal is actually very similar to the plan that is used by Members of Congress and their staff. This is a selling point that proponents should emphasize since most Americans realize that lawmakers would never subject themselves to something that didn’t work.
The second part discusses the economics of the health care sector, and explains the critical need to address the third-party payer crisis. More specifically, 88 percent of every health care dollar in America is paid for by someone other than the consumer. People do pay huge amounts for health care, to be sure, but not at the point of delivery. Instead, they pay high tax burdens and have huge shares of their compensation diverted to pay for insurance policies.
I’ve explained before that this inefficient system causes spiraling costs and bureaucratic inefficiency because it erodes any incentive to be a smart shopper when buying health care services (much as it’s difficult to maintain a good diet by pre-paying for a year of dining at all-you-can-eat restaurants). In other words, government intervention has largely eroded market forces in health care. And this was true even before Obamacare was enacted.
Medicare reform, by itself, won’t solve the third-party payer problem, but it could be part of the solution – especially if seniors used their vouchers to purchase real insurance (i.e., for large, unexpected expenses) rather than the inefficient pre-paid health plans that are so prevalent today.
Newt Tries to Out-Romney Romney, Endorses ‘Public Option’ in Medicare
In 1995, shortly after becoming Speaker of the House, Newt Gingrich mulled a radical overhaul of the U.S. Food and Drug Administration. As he put it to a room full of health insurers, “Maybe we’ll take out FDA.”
What made Newt likable to advocates of freedom is sadly no longer part of his schtick. Here’s how Andrew Stiles reports on Newt’s appearance on Meet the Press yesterday:
“I don’t think right-wing social engineering is any more desirable than left-wing social engineering,” he said when asked about [House Budget Committee chairman Paul] Ryan’s [R-WI] plan to transition to a “premium support” model for Medicare. “I don’t think imposing radical change from the right or the left is a very good way for a free society to operate.”
As far as an alternative, Gingrich trotted out the same appeal employed by Obama/Reid/Pelosi — for a “national conversation” on how to “improve” Medicare, and promised to eliminate ‘waste, fraud and abuse,’ etc.
“I think what you want to have is a system where people voluntarily migrate to better outcomes, better solutions, better options,” Gingrich said. Ryan’s plan was simply “too big a jump.”
He even went so far as to compare it the Obama health-care plan. “I’m against Obamacare, which is imposing radical change, and I would be against a conservative imposing radical change.”
If you close your eyes, it’s like listening to The Princess Bride. Medicare and Medicaid are nothing if not social engineering. So by Newt’s logic, we should get rid of them. But Newt also says that radical change is bad, which means we can’t. That leaves incremental changes. But incremental changes to massive social-engineering experiments are themselves social engineering, so we clearly cannot make incremental changes, either. ObamaCare is both social engineering and radical change. Again by Newt’s logic, ObamaCare is bad, and we must get rid of it, but we can’t. Truly, he has a dizzying intellect.
Newt’s objection to Paul Ryan’s Medicare reforms is no less incoherent. It appears to be that the reforms approved by the House would eliminate the traditional Medicare program as an option for Americans who enroll after 2021. So far as I can tell, Newt’s opposition to this feature is consistent with his past positions on Medicare reform. He wants to let people stay in traditional Medicare if that’s what they prefer, and would have traditional Medicare compete against private insurance companies for Medicare enrollees.
But it is completely inconsistent with Newt’s opposition to President Obama’s call for a so-called “public option” to compete with private insurance companies. In 2009, Newt told Good Morning America:
I guarantee you the language they draft for the public plan will give it huge advantages over the private sector or it won’t work…what they will do is rig the game…I mean, anybody who’s watched this Congress who believes that this Congress is going to design a fair, neutral playing field I think would be totally out of touch with reality.
Newt may not realize this, but he was actually explaining why his preferred Medicare reforms would fail: Congress would rig the game to protect the “public option” that Congress offers to seniors — i.e., traditional Medicare. House Republicans, led by Paul Ryan, rather bravely stuck to their guns when they kept a “public option” out of their proposed Medicare reforms. Ryan is offering Republicans credibility and success. By his own admission, Newt is offering them failure.
What’s up with Mitt Romney and Newt Gingrich? Does the Republican presidential nomination race have some sort of prize for insincerity or incoherence that I don’t know about?
Finally, Newt endorsed a “variation of the individual mandate” (tell me again why he opposes ObamaCare?) and said there is “a way to do it that make most libertarians relatively happy.” He must have meant to say leftists rather than libertarians. Regardless, I invite Newt to come to the Cato Institute so he can explain to people who actually care about freedom just how happy he’s going to make us.
Budget Cuts Look Familiar
What do these federal agencies and programs have in common?
Agricultural Research Service, Animal & Plant Health Inspection Service, Rural Development programs, Women, Infants & Children, Foreign Agricultural Service, National Institute of Standards & Technology, National Oceanic & Atmospheric Administration, Economic Development Administration, National Telecommunications & Information Administration, Small Business Administration, State Department foreign aid, Fund for African Development, International Development assistance, Economic Support Fund, Peacekeeping Operations, Trade Development Agency, Army Corps of Engineers, Bureau of Land Management, Fish and Wildlife Service, National Park Service, Bureau of Reclamation, National Forest System, Appalachian Regional Commission, Department of Energy administration, Fossil Energy Research & Development, energy conservation programs, National Endowment for the Arts, National Endowment for the Humanities, National Gallery of Art, Community Service Employment for Older Americans, National Institutes of Health, Centers for Disease Control, Low Income Home Energy Assistance, Administration on Aging, Youthbuild, Adult Education, programs for K-12 and higher education, Corporation for Public Broadcasting, Federal Aviation Administration, Federal Highway Administration, rail subsidies, Federal Transit Administration, Financial Management Service, Veterans Affairs construction projects, Housing Counseling Assistance, public housing programs, Community Development Financial Institutions Funds, Corporation for National & Community Service, Legal Services Corporation, Environmental Protection Agency, National Aeronautics & Space Administration, and the National Science Foundation.
They were all cut in 1995 under a rescissions package engineered by then-Speaker Newt Gingrich and cut last week in the budget agreement reached by Republican and Democratic leaders.
The lesson here is that there’s a big difference between spending cuts and terminating entire agencies and their programs. Like the mythological Hydra, the stump has to be burned after the head is cut off or else it’ll grow back.
Just as they did back in 1995, Republicans are doing a lot of talking about cutting the size of the federal government. However, they aren’t doing much talking about reducing the scope of the federal government’s activities. The Gingrich Republicans failed to reduce the scope of federal activities, and the result was a bipartisan spending orgy that has left the country’s finances in shambles. We literally can’t afford for history to repeat itself.
They Were for the War before They Were Against It
Doyle McManus at the Los Angeles Times highlights the zigging and zagging of some leading Republican presidential contenders when it comes to war with Libya.
Particularly noteworthy is Newt Gingrich. “Two weeks ago,” McManus writes:
the former House speaker and possible presidential candidate denounced Obama for not intervening forcefully against Kadafi.
“This is a moment to get rid of [Kadafi],” he urged. “Do it. Get it over with.”
Then Obama intervened in Libya. Was Gingrich pleased?
“It is impossible to make sense of the standard for intervention in Libya except opportunism and news media publicity,” Gingrich said Sunday. “Iran and North Korea are vastly bigger threats…. There are a lot of bad dictators doing bad things.”
That sounded like a flip-flop, so I asked Gingrich what he meant. He responded with an e-mail: “The only rational purpose for an intervention is to replace Kadafi. That is what the president called for on March 3, and after that statement anything less is a defeat for the United States.”
Actually, Gingrich was wrong both before and after Obama (inexplicably) chose to follow his advice. The only rational purpose for the use of the U.S. military is to advance U.S. national security. The Libya operation has never been justified on those grounds — it is a humanitarian mission to protect civilians — and it might actually make a minor and manageable problem far worse.
Qaddafi is a clown and thug; and no one will shed a tear if and when he leaves Libya – feet first or otherwise. But declaring Qaddafi’s ouster to be a suddenly vital U.S. interest, when a few mere months ago he was our supposed great ally in the fight against al Qaeda, epitomizes absurdity. If nothing else, Gingrich and other boosters of military action in Libya should have pondered — before we risked the lives of our troops, and committed the country to a potentially open-ended mission — whether some of the vaunted rebels might, in fact, be even worse than Qaddafi.
But I guess that never occurred to them.
How Dare Conservatives Stand athwart ObamaCare Yelling, Stop!
In a column for Kaiser Health News, Michael L. Millenson, President of Health Quality Advisors LLC, laments that conservatives in the U.S. House are approaching ObamaCare like, well, conservatives. He cites comments by unnamed House GOP staffers at a recent conference:
The Innovation Center at the Centers for Medicare & Medicaid Services? “An innovation center at CMS is an oxymoron,” responded a Republican aide…”Though it’s great for PhDs who come to Washington on the government tab.”
There was also no reason the government should pay for “so-called comparative effectiveness research,” another said.
“Everything’s on the chopping block,” said yet another.
No government-funded comparative-effectiveness research? The horror! For my money, those staffers (and whoever hired them) should get a medal.
Millenson thinks conservative Republicans have just become a bunch of cynics and longs for the days when Republicans would go along with the left-wing impulse to have the federal government micromanage health care:
After all, the McCain-Palin health policy platform in the 2008 presidential election called for coordinated care, greater use of health information technology and a focus on Medicare payment for value, not volume. Once-and-future Republican presidential candidates such as former governors Mike Huckabee (Ark.), Mitt Romney (Mass.) and Tim Pawlenty (Minn.), as well as ex-Speaker of the House Newt Gingrich, have long promoted disease prevention, a more innovative federal government and increased use of information technology. Indeed, federal health IT “meaningful use” requirements can even be seen as a direct consequence of Gingrich’s popularization of the phrase, “Paper kills.”
He even invokes the father of modern conservatism, William F. Buckley, as if Buckley would disapprove of conservatives standing athwart ObamaCare yelling, Stop!
Millenson’s tell comes toward the end of the column, when he writes:
traditional GOP conservatives… [have] eschewed ideas in favor of ideological declarations.
Eschewed ideas in favor of…ideas? My guess is that what’s really troubling Millenson is that congressional Republicans are eschewing left-wing health care ideas in favor of freedom.
Better late than never. Now if only GOP governors would do the same.
This Week in Government Failure
Over at Downsizing the Federal Government, we focused on the following issues this week:
- Sen. Rand Paul bucks the trend of wimpy spending cut proposals with a more serious plan.
- Perhaps Charlie Sheen’s agent should consider getting him a gig with HUD.
- A Senate Democrat supports a plan that would focus on spending cuts and not tax increases.
- Policymakers should roll back the punishing regulations and taxes that make it difficult for businesses of all races and sizes to succeed.
- Federal energy policy, Newt Gingrich, and “rank gooberism.”
Gingrich & Woolsey on Energy
The other day, The Wall Street Journal provided a public service by lambasting Newt Gingrich for his absurd speech to the ethanol lobby in Des Moines last month (money line: ”Obviously big urban newspapers want to kill it because it’s working, and you wonder, ‘What are their values?’”). Today, Gingrich and fellow ethanol-maven James Woolsey struck back in those very same pages. In doing so, Gingrich provided yet more evidence that he’s intellectually unfit for office.
“It is in this country’s long-term best interest,” he said, ”to stop the flow of $1 billion a day overseas.” Really? So money sent overseas is gone forever. News to me. The only thing you can buy with dollars earned from oil sales to the U.S. is to buy things denominated in dollars or to exchange them so that someone else can. And we sell a lot of stuff to foreigners that are denominated in dollars (treasury bills for one) and that money comes right back to the good old U.S. of A.
But put that aside. If Gingrich really believes this, then why not just ban all imports all together? Is that what the GOP is about these days – rank gooberism on trade?
Is Newt Gingrich Drawing on Camus or Carl Schmitt?
Andrew Sullivan points us to this report that Newt Gingrich is going to tell an audience at AEI that the Obama administration is engaging in “willful blindness” and “self-deception” about the threat posed to the United States by Islam. In the wake of his remarks urging the United States to emulate Saudi Arabian standards of religious freedom, Gingrich has promised to deploy “the lessons of Camus and Orwell” to illuminate our present predicament.
“Evading the confrontation with Evil may bring a second Holocaust. The mistakes made by the White House will exact a terrible price.”
What’s interesting is that this sort of thing is a long-standing trope in Gingrich’s rhetorical repertoire, although he has reserved it mostly for Israeli audiences. In 2007, Gingrich went to Israel and informed a group gathered at the Herzliya Conference that Israel was facing the prospect of a “second Holocaust.” Perhaps drawing on the lessons of Habermas, Gingrich explained that
We don’t have right language, goals, structure, or operating speed, to defeat our enemies. My hope is that being this candid and direct, I could open a dialogue that will force people to come to grips with how serious this is, how real it is, how much we are threatened. If that fails, at least we will be intellectually prepared for the correct results once we have lost one or more cities.
This year, Gingrich published a commentary in a right-wing Israeli tabloid owned by Sheldon Adelson repeating these arguments, with the paper promising readers that
The behavior of the Obama administration regarding Iran and terror is characterized by a complete disconnect from reality. Gingrich, a prominent Republican Party leader, warns that the Western Elites are evading a confrontation with Evil and that the flight from reality could bring a second Holocaust to the Jewish People. An alarm bell, before it’s too late.
Israel faces a range of important international security problems. Israelis have much more reason to be concerned about their national security than do Americans. And it’s entirely reasonable that people would disagree about the nature and breadth of the threats to Israel, let alone what to do about them. But this sort of thing is absolutely irresponsible. I find it striking that Gingrich has repeatedly lectured Israeli audiences and informed them–presumably based on his knowledge as a Washington insider–that his own government’s policy threatens a second Holocaust on the Jewish people. Is this a view he really holds? If so, I would think he would be much more alarmed than he is acting at present.
While Gingrich is claiming that his current proclamations are grounded in Orwell and Camus, it seems to me that his overall Friend-Enemy politics of late owe a good bit to Carl Schmitt.
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