Comment roundup 10/19.

Comment roundup 10/19. October 19, 2012

A hammer.I got a live one on twitter who dropped this old bromide…

Ok.  The first implication is that whatever Renee Jones believes about god is not a religion.  You don’t just get to brand all other god beliefs as religion before branding yours as “true” and call it a day anymore than I get to call my gut “sexy” and exercise “toxic” and consider myself in shape.

Second, god does not show love to everyone.  I’d like to acquaint you with my nemeses cancer, hurricanes, Rod Parsley, and poisonous plants without signs that say “don’t fucking eat me!”  These are not the creations of a god that loves us regardless of what you believe.

Third, give me one good reason to believe your religion is more likely to be true.  I do not accept it at face value.

The other comment comes from Dry Cracked Feet.

So much hatred against the republicans is not nice. Paul Ryan is a good economist and he knows the ways to improve the healthcare picture in the country.

Thanks Mr. Feet.  I’d like to draw a distinction here: I hate bad policies, I hate greed, and I hate dishonesty (amongst other things).  I only hate Republicans in that they unquestionably embody those qualities.  If you don’t think I should hate Republicans, you must convince me that they have good policies that operate in the best interest of most people and are above lying through their teeth for personal gain.

Now, on Paul Ryan and economics, for a moment I’ll forget about Paul Ryan’s numerous failings such as his dishonesty (no, really), his behavior that is, shall we say, not very intelligent, his utter cluelessness about foreign policy, and just talk about Ryan’s knowledge of economics (and what we can know of Paul Ryan when he’s not lying his ass off about economics).

First, he claims his plan will create 12 million jobs.  Pretty much every media outlet has pointed out that these were what we could expect regardless of who was in office.

As we have noted before, the 12 million figure is not a bad bet by Romney. Moody’s Analytics, in an August forecast, predicts 12 million jobs will be created by 2016, no matter who is president. And Macroeconomic Advisors in April also predicted a gain of 12.3 million jobs.

What’s more, the studies he and Romney use to get that number are from different sources.

We asked the Romney campaign, and the answer turns out to be: totally different studies … with completely different timelines.

For instance, the claim that 7 million jobs would be created from Romney’s tax plan is a 10-year number, derived from a study written by John W. Diamond, a professor at Rice University.

This study at least assesses the claimed effect of specific Romney policies. The rest of the numbers are even more squishy.

For instance, the 3-million-jobs claim for Romney’s energy policies appears largely based on aCitigroup Global Markets study that did not even evaluate Romney’s policies. Instead, the report predicted 2.7 million to 3.6 million jobs would be created over the next eight years, largely because of trends and policies already adopted — including tougher fuel efficiency standards that Romneyhas criticized and suggested he would reverse.

The 2-million-jobs claim from cracking down on China is also very suspicious.

This figure comes from a 2011 International Trade Commission report, which estimated that there could be a gain of 2.1 million jobs if China stopped infringing on U.S. intellectual property rights. The estimate is highly conditional and pegged to the job market in 2011, when there was high unemployment. “It is unclear when China might implement  the improvement in IPR protection envisioned in the analysis, and equally unclear whether the United States will face as much excess labor supply then as it does today,” the report says.

The Romney campaign has already used this study, in a misleading way, to claim that Obama’s China “policies cost us 2 million jobs.” Now the campaign has just taken the same figure and credited the claimed job gain to itself, even though the report does not examine any of Romney’s proposed policies.

This is not an economics genius.  This is someone who can’t realize when studies address different things.

Let’s also not forget that Ryan is incredibly inconsistent when it comes to economic decisions.  For instance, Ryan engages in the same pork spending he derides in, well, pretty much everybody but himself.

Let’s also not forget that even though Ryan promises that his tax plan will be revenue neutral (if only he had time to explain how) yet all neutral party sources have said it’s mathematically impossible without raising taxes on the middle class.

The fact is that history has shown that cutting income taxes for the wealthy, which is Paul Ryan’s record, does not stimulate the economy.

The top income tax rates have changed considerably since the end of World War II. Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The average tax rate faced by the top 0.01% of taxpayers was above 40% until the mid-1980s; today it is below 25%. Tax rates affecting taxpayers at the top of the income distribution are currently at their lowest levels since the end of the second World War.

The results of the analysis suggest that changes over the past 65 years in the top marginal tax rate and the top capital gains tax rate do not appear correlated with economic growth. The reduction in the top tax rates appears to be uncorrelated with saving, investment, and productivity growth. The top tax rates appear to have little or no relation to the size of the economic pie.

However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. As measured by IRS data, the share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. At the same time, the average tax rate paid by the top 0.1% fell from over 50% in 1945 to about 25% in 2009. Tax policy could have a relation to how the economic pie is sliced—lower top tax rates may be associated with greater income disparities.

Yet, Ryan seems to be gay-married to that strategy.

The best Ryan seems to be able to do is to try and fib about what the experts think (see the six “studies” Ryan claims support his economic plan and be grateful that sometimes Ryan’s GOP cohorts can be honest).  A good example is Ryan’s insistence that a group of Harvard economists approve of his voucher program for medicare.  The result was one of the authors of the study getting mad at them for saying that the study said the exact opposite of what it said.

Supporters for the Romney-Ryan approach to Medicare have a new talking point. They say a new study by “three liberal Harvard economists” proves that the plan’s competition will reduce health care costs without harming beneficiaries. But the study doesn’t say that.

And I should know. I’m one of the economists who wrote it.

Both Mitt Romney and Paul Ryan have said they would like to convert Medicare into a “premium support” (nee voucher) system. Their plans are different, and Ryan himself has proposed several versions. But they share a basic architecture. Starting ten years from now, new retirees would not receive a Medicare card, as they would today. Instead, they would receive a voucher and shop for an insurance policy in a specially regulated market…

How would this affect seniors? In particular, how many seniors would end up paying more to stay in traditional Medicare?

That’s the question that Zirui Song, Mikchael Chernew, and I set out to answer in the study, which was published in the Journal of the American Medical Association. To do this, we examined what would have happened if, today, something like the Romney-Ryan plan were in place: In other words, if today’s seniors were getting vouchers, how much would those vouchers be worth?

We found that 24 million seniors, or about two-thirds of the people presently enrolled in the traditional Medicare program, would have to pay more—specifically, an average of $64 per month or $768 per year. Some seniors already enroll in private plans, as part of the “Medicare Advantage” option that has existed, in one form or another, for many years. About 7 million seniors or more than 90 percent of that group would have to pay more.


First, it confuses costs and payments. Medicare Advantage plans bid less than traditional Medicare, but they are paid more. The plans are officially supposed to use these higher payments to sweeten the pot—add additional benefits, reduce cost sharing, and the like—though some likely go for profit as well. This is why the Affordable Care Act reduced the amount that the government pays to managed care plans, over howls of protest from conservatives. Bidding less does no good for the program if the government then overpays relative to what was bid.

Second, they miss a key part of the reason why the Congressional Budget Office estimated that Ryan’s voucher proposal would cost seniors more. Medicare Advantage plans can only cost what they do because the traditional Medicare program is in place to help them. Specifically, Medicare sets very low payment rates to providers, and Medicare Advantage plans bargain up a bit from those rates. Get rid of the traditional Medicare program, or even reduce its enrollment substantially, and the estimated cost of Medicare Advantage premiums skyrockets.

I could keep going, but you get the point.  Economists are advising one strategy, that Paul Ryan knows about, and he is insisting we do the opposite of what the majority of economists think we should.  He is not doing this because he is an economics genius.  He is doing this because it’s the line of his party, because it benefits the wealthy, and because he otherwise doesn’t have a fucking clue.

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