A Democrat suggests privatizing Medicare

The Democrat is Alice Rivlin, the former Clinton budget director who teamed up with Republican Pete Domenici to present a plan last week for tackling the budget deficit. Now, Rivlin is working with Rep. Paul Ryan (R., Wis.) to introduce a voucher system to privatize Medicare. From National Journal:

[Rivlin's plan is] very similar to Ryan’s “Roadmap for America’s Future” in that seniors would get lump-sum payments for the value of their Medicare benefits and use them to buy coverage in the private marketplace. The payments would climb slightly faster than consumer inflation, but they wouldn’t climb as fast as health care costs have been for decades. As a result, people now in their thirties would likely end up paying for a much bigger share of their health insurance when they retire than today’s seniors. On top of that, people now in their thirties would no longer even know how high their future out-of-pocket costs were likely to climb.

That’s why the idea has been such an anathema to Democrats, not to mention senior citizen groups like the AARP.

Though Rivlin’s approach wouldn’t slash Medicare spending as quickly as Ryan’s Roadmap, analysts say both plans would ultimately end Medicare as we know it.

(snip)

Rivlin has long backed the idea of a “premium support” program, which would keep traditional Medicare as the default for seniors but would charge them more out of pocket. Seniors who didn’t want to pay the higher premiums could take a voucher and enter a “Medicare Exchange,” similar to the health care exchanges being set up for uninsured people under the new health care law.

(snip)

Rivlin said her voucher plan is a blend of her premium support plan and Ryan’s Roadmap proposal. Rivlin cautioned that their voucher idea should be viewed more as a “concept” than a fully fleshed-out plan, and that they were still in the information-gathering stage. “It’s a first cut at whether we can agree on a set of principles,” Rivlin said. “We’re a long way from a bill.” … Rivlin, now with the Brookings Institution, said the pain would not be as acute as some might think, because seniors’ out-of-pocket costs would go down as managed care plans competed for their business. And no one could be turned away from the Medicare exchange.

The details would almost certainly change; setting the cutoff age at today’s 55-year-olds would probably be a tough political sell. Then again, perhaps today’s 55-year-olds understand that switching to a defined-contribution system for retirees’ health care may be the only way they receive anything close to the promised benefits for the rest of their lives. (Current Congressional Budget Office estimates peg the increase in Medicare spending between now and 2035, when today’s 55-year-olds will be 80, at more than 2 percent of GDP. By then, that should be around a half-trillion dollars.)

Demographic patterns make it clear that the intergenerational bargain is going to have to change sooner or later. As one of the 30-somethings referenced in the above article, I think paying less for my parents’ health care in retirement — while paying for more of my own, and therefore easing the burden on my own children — is a good trade. The devil will be in the details, but this is one of the conversations we must start having in earnest.

On a side note, how refreshing is it to hear a Beltway Democrat talk even a little bit about easing government out of an industry and letting the market work?

60 comments Add your comment

Ragnar Danneskjöld

November 23rd, 2010
7:10 am

As is the case with all government-managed benefit programs, medicare is doomed to fail. Either it becomes the bottomless money pit, requiring greater contributions by taxpayers every year into perpetuity, or it becomes the death panel, effectively refusing to cover many life-saving services. Any free market solution would be better than the present.

Skip

November 23rd, 2010
7:11 am

What branch of the service were you in? Or did I have to pay for your freedom? You do believe everyone should contribute don’t you?

HDB

November 23rd, 2010
7:13 am

The problem is that the market doesn’t work effectively in health care without a downward driving force!! Why are Canadians paying less for the same prescription drugs as Americans? Why are ALL drugs in the British system costing each person 10-pounds (sterling)? Reason: the downward force applied by GOVERNMENT!! It will take a public/private hybrid to ensure the downward economic force is applied to health care!!

One of a Kind

November 23rd, 2010
7:15 am

This is just a rumor but I’ve heard that if we were to focus a little effort on stuff like physical fitness and improved diet and reduced environmental pollution, over time we might actually alter those long-term healthcare cost curves in a more positive manner and maybe even make healthcare more affordable as a result. Of course, it is just a rumor. It’s nothing as comprehensive as something coming out of a place like the Brookings Institute. I hear they’re almost as thorough and unbiased in their work as that Heritage Foundation and that’s no rumor, that’s just plain truth, the whole truth and nothing but the truth.

One of a Kind

November 23rd, 2010
7:22 am

On another side note, how refreshing was it to hear that all Republicans did not walk lockstep in support of that brief that was filed challenging the constitutionality of the mandate in the healthcare legislation.

carlosgvv

November 23rd, 2010
7:35 am

At the bottom of this you can be sure money is talking. Privatizing Medicare will just put more money into the pockets of Big Insurance and more money into the politicians pockets. It’s amazing that so many Americans can still be fooled by these political antics.

Parliamentary death panels

November 23rd, 2010
8:00 am

A Republican-majority congress is a death panel of hundreds of grim reapers. The entirety of the justification for any government’s existence is to promote the general welfare. The idea of a Parliament takes democratic ideals too far because the consequences of a minority ascension into tyranny are simply too catastrophic. Naturally, the common thread between Republican generations and the continuity of conservative idealism is best depicted in the icon of the shotgun: (Cheney’s and Palin). It appears America is ready to go once more into the breech, dear friends. Expect more war. More corruption. More lies, and even more stupifying rebel-rousing from the Rushannities. People must be easily hypnotized. We fascinate. We fixate. We surge to any drum and ferment conformity like bare feet in a bathtub can ferment grapes .

That Palin could have survived her media gaffes in the last campaign, (or any remark she has ever made), is testimony that America has all it’s voter/somnabulists in a row, imprinted with its first matriarchal goose, in perpetual lockstep, mindlessly and dutifully casting itself down into the chasm between truth and titular tyranny.

Palin has a real chance in 2012 because irony rules our universe: Palin’s skeet skills so ostentatiously televised in her brayish command, “PULL!”, betray her intention to censor our press.

Give me liberty, or give me a dearth of reality shows. (sorry)

LeeH1

November 23rd, 2010
8:30 am

We had this before we had Medicare. It was called private insurance. We didn’t like it, since the death panels at the insurance companies would deny claims from people when they were no longer profitable. Hopefully, the patients would die before they could finish up their complaints and appeals. Insurance companies made much of their profits by simply out-waiting the patients.

And they would raise the rates for older citizens so they could make more money out of them. If they couldn’t pay the higher rates, that was OK, too, since as they got older, the more they would use the benefits, which didn’t benefit the insurance companies at all.

Medicare, in addition to helping out people who weren’t insured, also restored more profits to the insurance industry. That’s why you don’t see them crying over the rising costs of Medicare.

Tychus Findlay

November 23rd, 2010
8:48 am

If the government wants to takeover health care, it needs an opt out for those that choose not to participate in the program e.g. those that do not want to pay in OR collect benefits. (Same for Social Security.) My resistance as a conservative is that the government tells me that it can manage my money better than I can, so it will make choices for me and use its ability to throw me in jail for non-compliance to enforce its inane policies.

I received my annual SS statement in the mail yesterday and it projected that for every $760 that I contributed, I would get $1000 back…..in a minimum 37 years. I’m pretty sure I could invest that money and get a similar return in say 3-4 years.

jconservative

November 23rd, 2010
8:55 am

Couple of thoughts.

The government just gave the insurance industry 20 million customers under the new health care plan. Now the call is to give them another 50 million Medicare customers.

If a plan is administered by private companies under rules established by government is that a free market solution?

The current Medicare Supplement industry administered by private insurance companies under rules established by Medicare (CMS) is a total joke.

JP

November 23rd, 2010
8:56 am

Kyle – I usually disagree with you on everything, but stuff like this is worth investigating. Surely there are many cases where privatizing is better than government run. I still think we need to figure out a way to manage costs, but again, every option ought to be explored.

Cutty

November 23rd, 2010
9:05 am

another voice

November 23rd, 2010
9:17 am

One of a Kind – why should the for-profit insurance health care business be interested in exercise, diet and environmental health issues when under the (before October) system, poor health means higher profits for all. Someone gets sick they just drop them from insurance coverage or raise the rates. Have a pre-existing condition? No problem. Just pull yourself up by your own bootstraps. Why wouldn’t they want a return to the way things were? An unhealthy populace is good for the bottom line. Only under a socialist inspired system like Obamacare do we get any incentive for good health practices. Otherwise we get sicker people, higher costs, thus higher taxes and angry taxpayers, because everyone is covered from being exterminated, uh, terminated by for-profit insurance companies. So save a buck, take a hike. Save a life, be patriotic, avoid the “french” fries. Clean the air before it cleans your clock.

fair and imbalanced

November 23rd, 2010
9:19 am

Kyle,

Did you sign the Party oath in blood?

Jack

November 23rd, 2010
9:19 am

Social Security & Medicare wouldn’t be in trouble if the EIC was done away with.

Will

November 23rd, 2010
9:22 am

Medicare is a government-run national health care plan that takes from some and redistribute to others. In other words, medicare should stand toe-to-toe with what republicans preach as what cannot be accepted in the land of the free.

The only problem is that republicans, like democrats, are politicians first and foremost. Although their “concerns” with health care with carefully crafted to gain ultimate political gain, applying the carefeully “crafted” messsage to medicare would be political suicide.

Unless we someday elect a majority who care more about our beloved republic than the next election cycle, we will continue to get politicians who come up with the most effective campaign slogans. Don’t believe me? The DAY after the mid-term elections, some politician delcared his number one goal was to defeat President Obama. Not reduce spending. Not create more jobs. No address the uncontrolled spending related to Social Security, Medicare, etc. Beat President Obama. I am certain, if asked, this politician who rather that our beloved republic’s problems continue rather than see improvement if improvement led to President Obama’s re-election.

BS Aplenty

November 23rd, 2010
9:37 am

I’ve noticed over the past several months the plethora of auto, boat, motorcycle insurance company ads on TV – I mean a boat load of ‘em. I then noticed that my insurer, GA Farm Bureau, reduced, yes I said REDUCED, the premiums on all my cars (4). I’m still shopping around for a better deal because they cover my house as well so I’m confident I can lower the cost/value tradeoff even further.

Now, with high deductible health insurance and a health savings account we can offer this country the ability to protect a families assets from catastrophic illness, promote healthier lifestyles, and create a sustainable system of healthcare for all. More competition amongst the insurers and more financially involved consumers will cure our diseased healthcare system.

joe

November 23rd, 2010
9:38 am

Awesome, A Dem who can actually see the forest for the trees. All you others out there need to take a page out of his book that you don’t have to have government run everything. Try it, you’ll like it.

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Rafe Hollister

November 23rd, 2010
9:45 am

Sounds like an interesting proposal, but it will never get a fair hearing. Half the country automatically launches into the anti Big Business, Anti Insurance, Palin Derangement syndrome, without giving the proposal a chance. To them there is no greater sin that allowing the insurance companies and hospitals to make a profit. They had rather invest their money with big Government, who they trust to meet their demands, but who always seems to have to backtrack on the promises, because they spent the money on an earmark to study why pigs stink.

Left wing management

November 23rd, 2010
9:49 am

“.. easing government out of an industry and letting the market work?”

Easing the government out of an industry and letting the market work?

Easing the government out?

Just what universe are you living in, Kyle? This market fundamentalist ideology has had its legs cut out from it, across the globe and for all to see, and you’re still here pushing “easing the government out” as a solution?

Astonishing.

Beavis

November 23rd, 2010
9:51 am

HDB, the answer is that the average working Canadian pays 55% payroll tax plus a 15% VAT tax on purchases. By the way you are free to move there.

Mishap

November 23rd, 2010
9:53 am

I’m a little confused. How is handing cash to seniors to buy private insurance defined contribution? My employer telling me they’ll match my 401k is defined contribution. If I spend every penny my first week of retirement, they aren’t going to hand me another payment. This plan still pays out as long as you live and still grows indexed to inflation (and will inevitably be manipulated for political gain). So you retain a gov’t agency to hand you the cash and now you turn to a private bureaucracy whose job is to provide the minimum cost of coverage per dollar given to them? How exactly is that more efficient? Didn’t the gov’t figure out that handing cash to banks to have them do student loans was grossly inefficient since they lent at zero and banks charged 7%? It’s an end run around the gov’t bureaucracy but retains enough obfuscation that insurers can still profit greatly while retaining a big problem in the first place…lack of young people contributing to the insurance pool.

Sure the projections may have cost increases more reasonable b/c you’re limiting gov’t exposure but its a dramatic decrease in service levels (which I’m not necessarily against). That unfortunately won’t sit well w/ the AARP/near AARP demographic. Sure the gov’t is lazy and inefficient but then again so is private insurance so I’m not convinced its anything more than a distraction meant to enrich insurance companies.

Last time I checked healthcare wasn’t really a market good. You don’t buy more of it when the price goes down or decide not to buy b/c the cost moved up. You don’t walk out of the hospital when they tell you treatment for your 2nd heart attack is 50% more than the last one. If a treatment will give your kid a 20% chance at making it to adulthood and cost $1M, you’re still going to mortgage your house and sell everything you own to fund it even though it would be economically beneficially(and unconscionable) to let him go. Clearly that’s not a rational decision but it’s one that distorts any attempts at making an actual market from healthcare so why should it be free of gov’t intervention? Gov’t exists to deal w/ externalities and healthcare is certainly an example.

Beavis

November 23rd, 2010
9:54 am

Will, please wake up, the real problem is that they spent the social security / medicare money. If they had left it alone, like they were supposed to we would not have this issue. Our government has a spending problem, they need to fix that then the rest of the issues go away…

get out much?

November 23rd, 2010
10:08 am

I wonder how people would feel about opting out of mandated health insurance if EMTALA (Emergency Medical Treatment and Active Labor Act) were repealed. This is the law that requires hospitals to provide emergency care to anyone regardless of their ability to pay.

@@

November 23rd, 2010
10:11 am

This is the kind of change, I’VE been waiting for. Obama’s “loose change” ain’t cuttin’ it.

Kyle Wingfield

November 23rd, 2010
10:27 am

One of a Kind @ 7:15: You’re right. Now, what’s the best way to achieve that goal? Maybe making people aware that they’ll be responsible for paying a greater share of their health-care costs if they don’t take care of themselves? Nah, we should just ban Happy Meals instead…

Mishap @ 9:53: It’s a defined contribution because there’s a limit on the contribution, in this case on an annual basis, rather than the defined benefit of covering all your health-care costs.

Junior Samples

November 23rd, 2010
10:36 am

Yeah, because historically the private sector always has our best interests at heart.

Notice the lack of regulations we have???

Regulations exist because the government had to, not wanted to.

j

November 23rd, 2010
10:42 am

the caveman never needed health insurance. what’s all the fuss about. save your health insurance premiums and buy life insurance.

depending on how much you abused your body when you reach your latter years your body may stop functioning.

Guess what it’s called life. no one lives for ever.

Rafe Hollister

November 23rd, 2010
10:48 am

Regulations exist because the government had to, not wanted to.

Yeah Junior, we needed those warning labels on all those electric devices that say don’t use this in the bathtub, don’t touch this heater, it may be hot.

CJ

November 23rd, 2010
11:28 am

Kyle: “…how refreshing is it to hear a Beltway Democrat talk even a little bit about easing government out of an industry and letting the market work?

The irony is here is that, despite their rhetoric to the contrary, Republicans don’t actually support free markets. When it comes to pet rocks, for example, there’s full transparency and potential buyers have the option of choosing not to purchase the product.

With health care, on the other hand, there’s been little transparency since buyers often don’t know what they’ve purchased until after they file a claim (and they often don’t like what they discover). And, of course, choosing not to purchase the product is often not a choice if a person wants access to quality care for themselves and their loved ones.

When there’s little to no transparency and little to no choice, then that’s not “letting the market work.” Buyers are simply victims of corporations setting premiums specifically to maximize revenues with limited regard for actual coverage or no regard for affordability. (Starting January 1, the new health care law will limit the growth of premiums when it requires insurers to spend at least 80 percent of premiums collected on health care…a benefit that Republicans wants to repeal).

With regard to Rivlin’s idea, it’s interesting to see that Kyle appears to express support for health insurance exchanges today after he has demonized the Affordable Care Act which creates, wait for it, health insurance exchanges.

Personally, I have no objection to Medicare vouchers and exchanges as long as users have the option of jumping in and out of Medicare coverage whenever they choose. However, I see nothing in this plan that isn’t another way to reduce benefits and increase taxes for the poor and middle class, without doing anything to control the chief cause of our deficit problems in the out years: health care inflation. (Yes, they claim that seniors’ out-of-pocket costs would go down as managed care plans competed for their business, but this hasn’t happened for the rest of us in the past, and there’s no reason to believe that it would be any different for seniors).

BS Aplenty

November 23rd, 2010
11:31 am

Junior,

Every time I drive up to Chic-fil-A (best service in the fast food industry), I know they don’t think about me individually per se but they care about their business enough to give me that hot, tasty chicken sandwich each and every time I order it. Every time. And if they stop, then I’ll promptly take my business elsewhere. Just ask Wendy’s.

The insurance industry is no different. They want to sell you a competitive product to insure your family against certain defined health events. They will provide you excellent service and pay your claims because you and I will go elsewhere (maybe firstly to court) to get that service.

The government may ought to care for you, but if it doesn’t, you have little rememdy. The free market provides an instant rememdy.

BS Aplenty

November 23rd, 2010
11:37 am

BTW, “rememdy” is latin for “remedy.”

CJ

November 23rd, 2010
11:40 am

[The insurance industry] will provide you excellent service and pay your claims because you and I will go elsewhere (maybe firstly to court) to get that service.

Here are some terms and phrases that BS Aplenty might want to familiarize himself with: rescission, pre-existing conditions, exclusion, out-of-network, and most importantly, oligopoly.

Kyle Wingfield

November 23rd, 2010
11:50 am

CJ @ 11:28: That’s why I’ve written before in support of greater price transparency in health care: http://blogs.ajc.com/kyle-wingfield/2010/01/29/a-market-solution-to-health-care-pricing/

And that’s why I’ve also supported greater competition in the health-insurance market. ObamaCare doesn’t really address that because, for most Americans, it maintains the outdated, flawed approach of tying your health benefits to your employer via the tax code. Yes, it envisions insurance exchanges, which are not bad per se, but it insists on doing so on a state-by-state basis, which perpetuates another aspect of our flawed system (and reduces the likelihood of portability). And it insists on such a large number of coverage mandates, etc. that there can’t be any real competition. All as a means — as numerous Democrats have admitted — of sparking a crisis that makes a “public option” seem necessary. A public option which will eventually lead to single-payer, which of course is the antithesis of competition.

BS Aplenty

November 23rd, 2010
11:54 am

CJ, you’re talking about events that occur in the perverse structure of our current healthcare system. There’s no more important generator of “people with pre-existing conditions” than you have when an employer lays them off from work and they lose their healthcare benefits (forget COBRA for now – it’s useless). Now, you’ve got someone with a pre-existing condition in the healthcare system – and no solution.

Now, take that same person and require that they get their own health insurance, separately from their company, and you don’t have a person with a pre-existing condition because he still has healthcare coverage. Now, if you have a FAMILY (mom, dad and the kids), the odds of you losing your coverage are even slimmer. Include a Health Savings Account, that allows you to pay premiums when you’re unemployed, and the odds are reduced even further.

There are solutions to the issues you raise that don’t involve an unsustainable government system.

dagnabit

November 23rd, 2010
12:04 pm

Alice Rivlin needs to get out of politics and the Democrat’s party.

Swede Atlanta

November 23rd, 2010
12:15 pm

Ref Ragnar @ 07:10

The death panels exist today in PRIVATE insurance companies. Their only motive is profit and so they refuse to provide coverage for many, many procedures, tests and treatments. The insured has virtually no means of challenging or appealing their decision short of a lawsuit which in many cases would take longer than the insured is likely to live. Currently Medicare provides broad coverage and there is no profit incentive to deny treatment.

I would have no problem with moving toward an exchange type system for those that are currently early in their careers (30-35) where they can plan financially for that expense when the time comes.

But that will only work if private insurers will actually cover the elderly, will provide coverage for the kinds of tests and treatments senior require and can’t gouge them in terms of premiums.

My question is how does the transition work? I am working and paying today for my elderly father’s Medicare. I will be Medicare eligible under current law in 10 years. In addition to the monthly Medicare premium I will pay, how is the rest of my care going to be funded? I don’t think I can at this point in my career save enough additional in 10 years to be able to pay for a $10K plus plan when I retire.

JP

November 23rd, 2010
12:17 pm

For those of you that have the facts (regardless of your political leanings), is it possible for:

1) Insurance companies to make a profit? (I mean they ARE beholden to shareholders)
2) Have costs contained so that they are not a strain on our national budget?
3) Cover all Amaericans wanting insurance?

I mean is it possible that the above 3 just can’t co-exist?

CJ

November 23rd, 2010
12:39 pm

Kyle,

The notion that a public option would lead to single-payer is entirely false.

Obama and the Dems in Congress did not propose a public option that would morph into a single-player plan. Yes, some liberals would support single-payer, but I, for example, am not one of them. When I rail against big business, I’m referring to their directors and upper management. I have no problem with insurer’s middle management and staff and have no interest in throwing them out of work.

The public option that was proposed and killed by Joe Lieberman and the Republicans, was a plan to essentially allow people the option of buying into Medicare at actuarially sound rates–rates that every insurer is capable of offering, but won’t without real competition (see my reference to oligopolies).

I agree that we should break the link between our jobs and our health coverage. For that to happen though, various provisions of the Affordable Care Act have to be in effect: outlawing rescission, outlawing denial or rating based on pre-existing conditions, forcing insurers to use the premiums to pay claims, etc. Otherwise, individual households with no buying power would be dragged into a swamp with no good options or recourse.

One of a Kind

November 23rd, 2010
1:05 pm

One of a Kind @ 7:15: You’re right. Now, what’s the best way to achieve that goal? Maybe making people aware that they’ll be responsible for paying a greater share of their health-care costs if they don’t take care of themselves? Nah, we should just ban Happy Meals instead…

Actually I was leaning more toward just changing the name of that particular meal to something more appropriate such as “Obese Buffet” or “Diabetes Diet” and leave it up to the people to make the right decision once they’re given the facts, as with cigarettes. Then, perhaps we could follow up with a few things like covering fresh fruits and veges with those food stamps while banning flavored sugar waters and orange colored hydrogenated cheese substitutes, for starters. Finally, I was thinking it might actually be nice to stop polluting our water and air quite as much as we currently do in the name of the all mighty profit. I’ve got other ideas if you’re interested.

[...] is the original post: A Democrat suggests privatizing Medicare | Kyle Wingfield Related Posts:A Democrat suggests privatizing Medicare – Atlanta Journal Constitution [...]

BS Aplenty

November 23rd, 2010
1:42 pm

And just as a final note on the perversion of government interference in the economy: how much family wealth was just destroyed by the federal government through it’s perversion of the residential housing and the mortgage market? How many trillions of dollars in family wealth was DESTROYED by the federal government’s involvement in residential housing. That is wealth that families could have used to support elderly parents and pay their medical costs and potentially the survivors medical expenses.

Logical Dude

November 23rd, 2010
3:06 pm

BS Aplenty says: How many trillions of dollars in family wealth was DESTROYED by the federal government’s involvement in residential housing?

It was the LACK of oversight that allowed COMPANIES to generate mortgages without income verification. COMPANIES to buy those mortgages and pass them to investors, and COMPANIES to buy those investments, bundle them, and sell them to others.
Not quite sure why you’re blaming the federal government for something that COMPANIES did. Oversight was lost over former administrations weakening the oversight capabilities of the government.
Now let government have a little more oversight in Healthcare, and maybe the insurance COMPANIES won’t fleece the people the same way other COMPANIES did with housing.

Raymond Huffman

November 23rd, 2010
3:28 pm

“A public option which will eventually lead to single-payer, which of course is the antithesis of competition”

Right now, 5 companies, Aetna, BCBC, Cigna, United, and Wellpoint insure about 98% of all Americans. Before the exchanges come into play, this list will likely be down to 2 or 3, and was longer in the 80s. How is that competition? Anybody can pull a profit in that harebrained scheme! Especially where illness guarantees demand for the investor.

Money is better spent going to waste than profit. As for the “across state lines” argument, wouldn’t that do the same things banks did once interstate regulations were rolled back starting in the mid-80s? Remember Decatur Federal (which became 1st Union, which became Wachovia, which is now Wells Fargo)? Or how about the way corporations that receive favorable treatment rushing to that state? (see Delaware and Maryland corporations).

The only choice and competition in healthcare is deciding which Dr. a person is going to use. That competition has nothing to do with bureaucracy. Devil is in the details indeed, Defined Contribution = “voluntary” payroll deduction, contributions may become worthless (see 401k); Defined Benefit = built into existing salary, backed by full faith and credit of issuing entity (if worst comes to worse, tax money may bail out).

If all that “personal responsibility” stuff Republicans claim will lower healthcare costs is done, and people go to the Dr. when they truly have an illness, then the 19% of our economy that healthcare takes up (Republican numbers to criticize Obama care) may lower to it’s rightful place of about 7-9% of our economy. Of course all the insurance billionaires might not get to buy new yachts every year, but it’s a sacrifice collectively that the country can bear.

JF McNamara

November 23rd, 2010
3:43 pm

Kyle,

I’m all for investigating it. Sometimes privatization works, sometimes not. We need to look at all avenues.

In this case, it doesn’t matter if we privatize or not. All this solution really does (from your post at least) is make receiving less benefits more palatable. If we were maintaining the same level of service only cheaper then you could make the case that privatization is actually beneficial. This is simply less benefits, and we could do that either way.

In fact, this is likely to be more expensive since individual consumers have less pricing power than the government. That exchange would probably end up being pretty full.

BS Aplenty

November 23rd, 2010
3:44 pm

Illogical Dude,

What a private company does with it’s capital is between the company and it’s SHAREHOLDERS. Period. If the company’s management wishes to give money away, I don’t particularly care as I don’t own any part of it. Demonize the investment banks if you will, they may have made foolish investments, but they are private companies and can do such things. Ultimately, these companies will and should fail. Happens every day in this country. Happened today.

Now, when FNMA, FHLMC and GNMA purchase or buy subprime mortgages then that’s an issue for TAXPAYERS and I care about that. Because, as a taxpayer I have to pay for such GOVERNMENT folly – not so in the PRIVATE SECTOR. If you really want to keep score just ask which cost you a penny: TARP or the bailout of FNMA and FHLMC.

Kyle Wingfield

November 23rd, 2010
3:52 pm

Logical Dude: Do you really think the regulators didn’t know what was happening in the housing market? There’s this false idea out there that the feds were smart enough to know everything was headed for a cliff, and that they would have prevented the meltdown if they’d only had more authority. Instead, our wise men were busy, among other activities, maintaining the negative real interest rates that gave the banks an incentive to shovel money out the door as fast as possible.

I’m not at all saying that the banks were blameless. But to pin all the blame on them, and ignore the enormous co-starring role the policy makers and regulators played in this mess, is not very, ahem, logical.

BS Aplenty

November 23rd, 2010
3:55 pm

That should be “…purchase or guarantee subprime mortgages…”.

P.S. Mr. Bookman and Ms. Tucker no longer allow my posts on their blogs. I guess they got tired of “having their hat handed to them.” Score two for the good guys.

BS Aplenty

November 23rd, 2010
4:01 pm

…oh, and I liked Luckovich’s “colored” drawing. Is that a racist comment? ah-hahahahahahahahaha….