Is libertarian economics what’s killing the GOP?

Most diagnoses of what ails the Republican party have been focusing on social conservatism, saying that Republicans need to stop opposing gay marriage and abortion if they want to start winning national elections.  But now some are arguing that the Republican commitment to libertarian economic policies–that is, a commitment to an untrammeled free market–that’s really to blame. [Read more...]

Tim Pawlenty’s economic plan

GOP presidential candidate Tim Pawlenty, the former governor of Minnesota, laid out an ambitious and unusually specific plan to get the economy going again:

“Growing at 5 percent a year rather than the current level of 1.8 percent would net us millions of new jobs, trillions of dollars in new wealth, put us on a path to saving our entitlement programs,” Pawlenty said in his first detailed speech on economic policy since he formally declared his White House ambitions a little over two weeks ago.

The economy averaged 4.9 percent growth between 1983 and 1987, and grew at a 4.7 percent rate between 1996 and 1999. A sustained annual growth of 5 percent for a decade would be unprecedented in modern times. . . .

Pawlenty said such growth eventually would translate to $3.8 trillion in new tax revenue that would reduce the deficit by 40 percent.

Pawlenty’s plan also would simplify individual tax rates to just three options and cut taxes on business by more than half. His cuts go further than House Republicans’ recent proposal, which the Tax Policy Center said would cost about $2.9 trillion over the next decade. . . .

In a speech heavy on specifics, Pawlenty proposed a three-tier income tax system:

• The estimated 45 percent of U.S. households that did not pay income taxes in 2010 would see no change in their tax rates.

• Individuals would pay 10 percent tax on the first $50,000 of income. Couples earning $100,000 would also pay that rate.

• “Everything above that would be taxed at 25 percent,” Pawlenty said.

He said he wants to cut business taxes from the current rate from 35 percent to 15 percent, and he called for dismantling vast pieces of the government.

“We can start by applying what I call the Google Test,” he said. “If you can find a service or a good on Google or the Internet then the federal government probably doesn’t need to be doing that good or service. The post office, the government printing office, Amtrak, Fannie Mae and Freddie Mac were all built for a different time in our country and a different chapter in our economy when the private sector did not adequately provide those services. That’s no longer the case.”

via Pawlenty’s economic plan aims for 5 pct. growth – Yahoo! News.

Democrats are savaging the plan, calling it “ridiculous.”  But what do you think?

Medicare reform?

Demagoguing Medicare reform proposals.  From the Washington Post fact checker:

“The Republicans have a plan to end Medicare as we know it. What they would do is they would take the people who are younger than 55 years old today and tell them, ‘You know what? You’re on your own. Go and find private health insurance in the health-care insurance market. We’re going to throw you to the wolves and allow insurance companies to deny you coverage and drop you for pre-existing conditions. We’re going to give you X amount of dollars and you figure it out.’ ”

— Rep. Debbie Wasserman Schultz (Fla.), chair of the Democratic National Committee, May 29, 2011

Something about the debate over Medicare prompts eye-popping rhetoric. A few weeks ago, it was Health and Human Services Secretary Kathleen Sebelius saying the Republican plan for Medicare would let cancer patients “die sooner.” This weekend, on CBS’s “Face The Nation,” Wasserman Schultz said Republicans would “throw you to the wolves.”

We’ve previously taken Republicans to task for claiming their plan is “a system just like members of Congress and federal employees have.” Not so. We also criticized Sebelius for her assertion. So where does the DNC leader stand in this collection of conflicting claims?

The Facts

The current Medicare system, in place since the mid-1960s, is essentially a government-run health care program, with hospital and doctors fees paid by the government, though beneficiaries also pay premiums for some services as well as deductibles and coinsurance. The new system envisioned by House Republicans would transform Medicare into a competitive market for people who are now younger than 55.

Retirees would get from the government what Rep. Paul Ryan (R-Wisc.), the chairman of the House Budget Committee, calls “premium support” — a set payment adjusted to inflation; they would use that money to pick from a range of plans offered by insurance companies through what is termed a Medicare exchange. Democrats tend to refer to this payment by the more ominous-sounding word “voucher.”

Wasserman Schultz did not say voucher, but her statement suggests that people would be handed a check (“X number of dollars”) and then have to go out and find a plan that they can afford. She also said the plan would “allow insurance companies to deny you coverage and drop you for pre-existing conditions.”

Neither of those claims are true. The system as envisioned by Republicans would operate much like the Medicare prescription drug plan currently does. The government would not give people a check or anything like that; the government would handle the funds, just as they do under the drug plan. As the nonpartisan Congressional Budget Office said when it examined the plan, “The premium support payments would go directly from the government to the plans that people selected.”

Meanwhile, different plans approved by Medicare would compete for business, as under the drug plan. Moreover, the GOP proposal specifically says that to participate in the Medicare exchange, insurance companies would have to accept all retirees.

via Wasserman Schultz’s bogus claim that the GOP Medicare plan will ‘throw you to the wolves’ – The Fact Checker – The Washington Post.

Actually, the proposal sounds like the Democrats’ health care program that everyone will be on! If that is so, why are (1) Republicans for it, and (2) why are Democrats against it?

Why do Republicans oppose the financial reform bill?

Someone asked me that question today. Is it just the current political climate? Don’t shady practices interfere with the free market system? After all, the stock market has regulations to make sure it operates as it should. Why shouldn’t we regulate these other financial markets that, when they go wrong, mess up the entire economy? Are Republicans in the pocket of the big investment banks?

Could someone explain? (Don’t look at me to do it. This English major thinks “derivative” means non-original.)


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