Category Archives: BERNIE

I don’t like Bernie because his “Medicare For All” plan is terrible for America’s health and economy

Bernie’s “Medicare for All” plan ignores facts: we can’t afford it, the European system floated on American money, and socialized medicine has bad outcomes.

This is a somewhat updated version of a post I wrote in February 2016, before the Hillary mafia got Bernie to retire from the fray. When I learned from my children about a polished, easy-to-consumer blog called I Like Bernie, But…, which was intended to allay fears about Bernie’s radical policies, I decided to create a counter-blog called I Don’t Like Bernie, Because….., and attacked him for his socialism, his tax plans, his anti-Second Amendment stance, and his socialized medicine plan.

Although I don’t think Bernie will be the Democrat nominee, the extraordinary weakness of the other candidates may mean that this wannabe tyrant somehow ends up as the last man standing. If that’s the case, I want to make sure my Bernie exposés are out there once again. Certainly the people behind I Like Bernie, But are hopeful that he’ll run again, for they’ve updated the website. It’s basic format is still the same, for its information is short, clear, and wrong. Today I’m tackling everything that’s wrong with Bernie’s plan to socialize American medicine.

The I Like Bernie site imagines a worried Progressive voter exclaiming “I heard he wants to get rid of Obamacare!” Not to worry , says I Like Bernie. In fact, Bernie wants to make Obamacare even better by putting our entire medical system into government hands:

This promise — that everyone will get high-quality, free medical care, thereby saving American families thousands of dollars a year, while keeping them healthier — is false. There is no way Bernie can do this. The numbers don’t add up, and both the Obamacare experience in America and the socialized medicine experience in Europe show that the free market, not government, is the only way to bring costs down, making quality medical care available to everyone. If you have the patience, this post will walk you through the analysis, using what I hope is clear, simple language, making learning about the economics of medical care a relatively painless process. (Or, as the doctor with the big needle aimed at your arm always says, “This won’t hurt a bit.”)

What Bernie promises

Bernie’s campaign, in its ongoing effort to pretend that Bernie is not a socialist (he is, and that’s a bad thing), has titled his plan “Medicare for all.” When he talks about his plan, though, Bernie skips that cute Medicare euphemism and goes for the kill — the government will be in charge of everything:

  • Create a Medicare for All, single-payer, national health insurance program to provide everyone in America with comprehensive health care coverage, free at the point of service.
  • No networks, no premiums, no deductibles, no copays, no surprise bills.
  • Medicare coverage will be expanded and improved to include: include dental, hearing, vision, and home- and community-based long-term care, in-patient and out-patient services, mental health and substance abuse treatment, reproductive and maternity care, prescription drugs, and more.

Wait? You didn’t see the word “government” in the above quotation? Well, it’s there. You see the “single payer” to whom Bernie refers is the government. That’s a euphemism too. The government isn’t really paying for anything at all, because the government doesn’t have money of its own. It never earns money, it takes money. Thus, all of the money in its bank account is actually taken from every American who pays taxes.

So what Bernie really means when he talks about single-payer nationalized medicine is that he wants “taxpayer-funded” health care. He envisions using taxpayers to fund his grandiose plan of setting up a system in which the government takes those taxpayer funds and, after siphoning off vast funds for administrative salaries, waste, and graft, takes what’s left to pay for doctors, nurses, physician’s assistants, hospitals (everything from janitors to floor clerks to surgeons), dentists, optometrists, audiologists, home care providers, and pharmaceuticals. It will impose these fees from the top down, bullying doctors, dentists, and nurses who spent years, or even decades, perfecting their skills; hospitals that have invested millions in infrastructure to provide patient care; and pharmaceutical companies that routinely invest millions in research that usually comes up dry, in the hopes of hitting it big with the odd medicine here and there.

Here’s the truth: Even if you love Bernie’s plan, it can’t work. The numbers won’t add up, just as they haven’t been adding up in Europe or in America (with Obamacare). In the rest of this post, I’ll explain why. (Incidentally, the principles set out in this discussion apply with equal weight to all of the Democrats, each of whom promises, quickly or slowly, to implement socialized medicine in America.)

America cannot afford Bernie’s plan

Bernie promises that, by raising taxes on “the rich,” he can cover the costs for everything he promises, including putting the government entirely in control of doling out people’s money for medical care. I blogged here about the problems with Bernie’s general promise that “the rich” can pay for all of his plans, so I won’t repeat that discussion. Instead, I’ll just tell you here that they can’t. In this post, I’ll focus solely on Bernie’s scheme to fund a nationalized healthcare plan.

Bernie boasts that the plan will save middle class people thousands a year, but he’s playing word games when he says that. The reality is that, while middle class people will no longer have to write checks to their insurance company (assuming they don’t get insurance through their employer) or pay for deductibles and medicines, they’re still going to take a financial hit because taxes must go up significantly to fund his plan. Even under the most optimistic scenario (which we know never proves to be the case), middle class people will have to pay a lot of money if the system isn’t going to be running a multi-trillion deficit by the end of a decade.

During this campaign season, Bernie’s been cagey about details when it come to his plan. In April, though, he did release some bullet-point information offering a smorgasbord of plans that all involve draining the limited resources of the middle class and the rich:

  • Creating a 4 percent income-based premium paid by employees, exempting the first $29,000 in income for a family of four
  • Imposing a 7.5 percent income-based premium paid by employers, exempting the first $2 million in payroll
  • Eliminating health tax expenditures
  • Making the federal income tax more progressive, including a marginal tax rate of up to 70 percent on those making above $10 million
  • Making the estate tax more progressive, including a 77 percent top rate on an inheritance above $1 billion
  • Establishing a tax on extreme wealth
  • Closing a tax-loophole that allows self-employed people to avoid paying certain taxes by creating an S corporation
  • Imposing a fee on large financial institution
  • Repealing corporate accounting gimmicks

Even the Bernie-friendly hard Left Vox outlet has a hard time envisioning how Bernie’s plan is going to work:

Financing the health care system that Sanders envisions is an immense challenge. About half of the countries that attempt to build single-payer systems fail. That’s Harvard health economist William Hsiao’s estimate after working with about 10 governments in the past two decades. Whether he is in Taiwan, Cyprus, or Vermont, the process is roughly the same: Meet with legislators, draw up a plan, write legislation. Only half of those bills actually become law. The part where it collapses is, inevitably, when the country has to pay for it.

This is what happened when Sanders’s home state of Vermont attempted to create a single-payer plan in 2014. Much like Sanders, local legislators outlined a clear vision of the type of health plan they’d want to extend to all Vermonters. Their plan was arguably less ambitious; it did require patients to pay money when they went to the doctor.

But Vermont’s single-payer dream fell apart when the state figured out how much it would need to raise taxes to finance its new system. Vermont abandoned the government-run plan after finding it would need to increase payroll taxes by 11.5 percent and income tax by 9 percent.

Even if one assumes that Bernie was able to push through some sort of a plan (kind of like Obama pushed through Obamacare), it’s not going to work. What will really happen is that the healthcare system will become another huge, unfunded liability, while chronically sucking wealth out of the American economy. This Daily Caller analysis is as true today as it was when written in 2016:

An analysis of Vermont Sen. Bernie Sanders’ single-payer health-care plan released Wednesday reveals that despite significant tax increases, it would add between $3-$14 trillion to the federal deficit over 10 years, while giving the United States the highest capital gains tax rate in the developed world.

It would also raise the top tax rate to 85 percent, according to the analysis by the bipartisan Committee for a Responsible Federal Budget.

Sanders proposed what he calls a “Medicare for all” plan, which his campaign estimates would cost an additional $1.4 trillion per year. It would be financed by six separate tax increases. The CRFB found, though, that the tax hikes would not be enough to cover the program’s cost, and that it would add $3.1 trillion to the federal deficit over 10 years.

*snip*

The campaign estimates that replacing the Alternative Minimum Tax (AMT), personal exemption phaseout (PEP), and Pease limitation with a 28 percent limit on deductions would result in a revenues of $150 billion over 10 years. The CRFB finds that in fact this would lose the federal government $250 billion. Sanders’ campaign believes his proposed employer payroll tax and income surtax would provide $8.4 trillion over 10 years. Though using CBO estimates of what those taxes would bring in revenues, the CRFB found that it would more likely be less than $7 trillion in revenue over a decade.

Many of these changes also would also have negative macro-economic effects that would be difficult to project. For example, Bernie’s plan to tax capital gains and dividends as ordinary income would have a top rate of 62 percent (52 percent from income, 6.2 percent from his Social Security plan, and 3.8 percent from a Medicare investment surtax).

You can read more of that article here. If you’re a numbers person, you can also study this handy-dandy chart, from the same article:

A three-trillion-dollar deficit over ten years, just for healthcare costs, is a very big deal.

Oh! And if you’re a young person reading this, there’s one more thing you need to know: You’re going to be the one paying for this nationalized healthcare, although it’s not clear whether you’ll ever see a real benefit from it.

Imagine that the US already has socialized medicine. Now think about yourself as compared to your grandparents: You are as healthy as a horse and almost never see a doctor. Your grandparents, however, often need to see doctors for a variety of health problems that become more common as the human body ages. Logically, then, your grandparents, along with everyone else’s grandparents, are going to receive the greater part of the healthcare provided in America.

Here’s one other thing you need to think about in connection with your grandparents: They’re retired, which means they’re not earning money and are therefore no longer paying income taxes. America already has a huge debt, so there’s no extra money lying around to pay for Bernie’s plan. What this means is that, as future government spending piles up, even as your grandparents take more from the system, they won’t be generating any future wealth to offset their usage. You, on the other hand, are entering your peak working years, making your generation the government’s cash cow for income taxes. You will be paying a lot of money into a system that you are not using.

Under this scenario, you have to hope that the generation behind you also works hard and pays money into the system, and that the same holds true for several subsequent generations. Otherwise, when it’s your turn, you may find that the system is running on empty — which is precisely what has happened already with Social Security and Medicare. Nor will this problem of the takers not paying and the payers not taking go way any time soon. Because Americans are living longer, the crowd at the top, the old people demanding medicine but not paying taxes, keeps getting bigger.

In other words, when it comes to nationalized health care with a vast and growing elderly population, a “pay it forward plan” is a high-risk, low-reward deal for the young ones doing the paying. In other words, what Bernie is proposing is nothing more than a giant Ponzi scheme. This is a scheme that promises investors huge returns but, in fact, creates no wealth. Instead, early investors receive money paid in by later investors. Eventually, of course, you run out of new investors to pay off the old ones. At this point, the whole scheme collapses.

Progressive claims to the contrary, European health care not the wonderful thing that you think it is

I don’t have to be in the room with you to know what you’re yelling now at the computer screen: “What about Europe?! Socialized medicine has worked in Europe.” I’m sorry to break this to you, but it hasn’t — or, at least, it hasn’t worked as you think it has.

When talking about European socialized medicine, there are two things to consider: Whether the system can be funded and whether the people living under the system get quality care? I’ll deal first with funding, and then second with the care Europeans receive.

The socialized medicine system in continental Europe starts with the end of World War II. After WWII ended, large parts of Western Europe were completely flattened. The infrastructure was gone, six years of war having effectively bombed Europe back to something shortly after the Stone Ages. Eastern Europe, of course, was starting its long darkness under Soviet Communist rule.

The anti-Communist United States was quite worried that, given the destruction in Western Europe, the Soviets could easily expand their sphere of influence into the West. The United States therefore embarked up the “Marshall Plan” to rebuild Europe. Europeans neither had to earn nor repay the money that America handed over; it was a gift to get Europe back on its feet, both for humanitarian reasons and so that it would resist communism. When Europe industry started rolling again, it had very little debt to repay. the Marshall Plan was like an industrial head start or, to use a sports metaphor, a big golf handicap.

In addition to cash handouts, the United States gave Europe another big gift: It took on most of Europe’s defense costs during the Cold War. The various nations certainly had their own armies, but these armies were small and usually contributed only a minimal amount to the hot wars that broke out during the Cold War. As those of you who are anti-war know, it’s expensive to have a military. European nations did not have to bear that expense, or they bore a minimal, almost ceremonial defense burden.

With the money Europe didn’t pay for capital expenditures, that it did not pay on repaying loans for infrastructure development, and that, for decades, it did not pay for defense, Europe ended up having room in its budget for healthcare. In other words, even as Americans were paying out-of-pocket for their own health care, their tax dollars were also being used to help fund Europe’s “socialized” medicine.

It’s certainly true that Europeans also paid for the own healthcare through extremely high taxes. These high tax rates worked well when European countries, which are all smaller than America, had homogeneous populations. That is, almost everyone in these countries had shared values that included a willingness to pay into the system when young based upon the belief that, when a specific generation of young people stepped up to old age, the next generation of young people would take on the burden of working and paying for the system. It was all very fair and very sweet.

But here’s something you may not know about socialized countries: The people in them don’t have babies. After the post-war baby boom ended in the early 1960s, European adults began to have fewer and fewer children. Europe now has a negative growth rate, meaning that it’s not having enough babies to replace the old people who age expensively and then, once they reach ripe old ages, finally die. The youthful population is shrinking, while the bulk of the population keeps aging.

Let me remind you about what I said above: a “pay it forward” medical system doesn’t work when the bulk of the users are too old to pay into it, even as the number of young people paying into it keeps shrinking. You can imagine that this puts great financial stress on the system. The stress is worse because the end of the Cold War meant serious diminution in American dollars funding the military, which had for decades freed up European cash for health care.

Looking at Germany’s shrinking youth population, German Chancellor Angela Merkel made the fateful decision to stem the financial losses resulting from a vanishing working-age population by welcoming in hundreds of thousands of Middle Eastern and North African immigrants, almost all of whom were young. On paper, it looks like a fine idea: If your working population is vanishing, import a new one.

What Merkel forgot is that a primary element behind European socialism’s success was a small, educated, homogeneous population that played by the rules. The new immigrants weren’t raised in that belief system. In addition to being largely illiterate, the new immigrants operate under a “I’ll take everything I can now, while I can” world view. Their Muslim faith adds an additional psychological element, which is the doctrinal belief that non-Muslim populations rightly should support Muslims. So instead of paying into the system like good native-born Europeans, the new immigrants are taking even more out of the system, raising the stress level.

This immigrant trend has been taking place for some time now, as Europe started decades ago opening its doors to people from the Middle East and North Africa in order to replace its decreasing population growth. At a slow trickle, Europe could adjust somewhat to accommodate the stress on the healthcare system, both in terms of funds and infrastructure. With millions of people banging on Europe’s doors, though, it’s very doubtful that the system can hold out indefinitely.

In sum, socialized medicine in Europe was a functioning program for a few decades only because of a unique set of circumstances: Lots of American money, no major defense costs, a post-war baby boom, and a homogeneous population with shared values. Take away any one of those factors, and socialized medicine starts having financial troubles. Take away all of those factors and socialized medicine will swiftly come to the end of the line.

In addition to being unaffordable absent extraordinary circumstances (which are not present in America), Europe’s medical care isn’t now and never was that good. Yeah, yeah, I know you’re shocked to hear that. After all, back in 2000, the World Health Organization (“WHO”) came out with a report that savaged the American healthcare system when compared to Europe.

The WHO report concluded that, on overall performance, the world’s richest and most powerful nation managed to rank at only 37th place when providing overall healthcare. Here’s the thing: You should never rely on a study’s conclusions unless you know the metrics that controlled the study’s outcome.

When Americans think of healthcare, they think of speedy access and good results: They might say, “My grandmother got a new hip within two weeks of the doctor saying she needed one,” or “my father’s cancer has been in complete remission for 10 years,” or “I was hospitalized immediately when I got pneumonia,” or “I can almost always see my doctor within two days after I call” . . . that kind of thing. Thus, when Americans hear about a presumably reputable study stating that America is only in 37th place when it comes to quality medical care, they think this means that, their own experiences notwithstanding, for everyone else the new hip never happened, the cancer killed someone, the pneumonia also killed someone, and the doctor’s wait-list was months long (all of which was true for the VA, before it got overhauled, which was the only example of truly socialized medicine we have here in America).

Putting aside the VA’s sad history, the reality is that the WHO report got it all wrong about American medicine. You see, WHO wasn’t interested in the things that matter to Americans when they think about quality treatment: namely, outcomes and wait times. WHO’s metric was whether medicine was socialized or not. The more socialization, the higher the scores, regardless of outcome.

Scott Atlas, in a great article entitled “The Worst Study Ever?” took the time to break out the numbers:

World Health Report 2000 was an intellectual fraud of historic consequence—a profoundly deceptive document that is only marginally a measure of health-care performance at all. The report’s true achievement was to rank countries according to their alignment with a specific political and economic ideal—socialized medicine—and then claim it was an objective measure of “quality.”

*snip*

Before WHO released the study, it was commonly accepted that health care in countries with socialized medicine was problematic. But the study showed that countries with nationally centralized health-care systems were the world’s best. As Vincente Navarro noted in 2000 in the highly respected Lancet, countries like Spain and Italy “rarely were considered models of efficiency or effectiveness before” the WHO report. Polls had shown, in fact, that Italy’s citizens were more displeased with their health care than were citizens of any other major European country; the second worst was Spain. But in World Health Report 2000, Italy and Spain were ranked #2 and #7 in the global list of best overall providers.

Most studies of global health care before it concentrated on health-care outcomes. But that was not the approach of the WHO report. It sought not to measure performance but something else. “In the past decade or so there has been a gradual shift of vision towards what WHO calls the ‘new universalism,’” WHO authors wrote, “respecting the ethical principle that it may be necessary and efficient to ration services.”

*snip*

The nature of the enterprise came more fully into view with WHO’s introduction and explanation of the five weighted factors that made up its index. Those factors are “Health Level,” which made up 25 percent of “overall care”; “Health Distribution,” which made up another 25 percent; “Responsiveness,” accounting for 12.5 percent; “Responsiveness Distribution,” at 12.5 percent; and “Financial Fairness,” at 25 percent.

The definitions of each factor reveal the ways in which scientific objectivity was a secondary consideration at best. What is “Responsiveness,” for example? WHO defined it in part by calculating a nation’s “respect for persons.” How could it possibly quantify such a subjective notion? It did so through calculations of even more vague subconditions—“respect for dignity,” “confidentiality,” and “autonomy.”

That’s just a small portion of a superb article. I urge you to read the whole thing.

As another example of the GIGO (Garbage In-Garbage Out) factor when it comes to comparing American medicine to medicine in other parts of the world, perhaps you’d like to know why high school and college textbooks keep saying that rich, powerful America comes in at a dismal 54th place for infant mortality.

What the textbook authors don’t know, or ignore, is that, when it comes to calculating infant mortality rates, different countries have different ways of determining what’s a “live birth.” America is one of the few countries in the world that counts any baby born alive, no matter how fragile it is, as a living baby for infant mortality purposes.

In other countries, including Europe and Asia, the public records count as a “live birth” only babies that are a certain minimum size or weight, or that have already survived a certain amount of time outside of the mother. This means that comparing U.S. numbers with other countries’ numbers is an apples and oranges comparison unless you adjust for the differing baseline of what constitutes a live birth. Any study that ranks America so low on infant mortality is based upon a flawed comparison of unequal data. What we really should be ranked upon — and ranked very highly — is the value we give to every life, no matter how fragile.

Remember that, as Mark Twain or Disraeli (or someone else) said, there are lies, damn lies, and statistics.

The reality is that America has very good medical outcomes and that people have long had swift access to quality medical care. Moreover, because there is lots of money flowing through the system (rather than clutched in a government bureaucrat’s fists), businesses have an incentive to invest in researching new medicines or coming up with new techniques.

Money, after all, is a fabulous motivator. Lack of money leaves you in the situation of my aunt, a fervent communist who lived out her days in East Germany. In her “upscale” party-member apartment, her kitchen sink was broken — and had been broken for nine years. “Never mind,” said Auntie Marxist. “I’m on the list for a government plumber to come and fix it.” So far as I know, she was still on the list with that broken sink a decade later when she died.

Underlying that perverse WHO study is the reality that the government is ultimately more concerned with the bottom line than it is with any individual. When push comes to shove, you’ll make financial sacrifices to save your parent’s or child’s life. Government doesn’t care. It doesn’t love you. You’re a statistic.

This ugly reality has revealed itself in England, which has for some time been relying heavily on healthcare rationing to make up for missing money in a system that’s breaking down for the reasons I described above. By the way, in addition to diminishing funds, lack of competition worsens the situation. If patients are being killed in Hospital A because of that hospital’s penny-pinching ways, they have no option to go to Hospital B, that will treat them better. In England, they’re all Hospital A.

And that’s how you end up with stories about the Liverpool Care Pathway for the Dying Patient. Isn’t that a nice name? Rather than forcing painful and ultimately unhelpful medical procedures on people who are near death, let them go peacefully, with just palliative (comfort) care.

The problem was that people were taking too long to die, so many National Health Care hospitals refined the Pathway’s definition of what constitutes “near death.” The resulting scandal revealed reports of hundreds, even thousands, of elderly patients who were not at death’s door, but who were nevertheless hastened to their deaths, starving, dehydrated, and abandoned.

The highest level of the British government’s supports the cold, hard calculation that old people in England, who are no longer paying money into the system, are a burden on socialized medicine. Just a few years ago, a senior government adviser said that the National Health Service should save money by killing people with dementia on the ground that old and sick people have a duty to die (emphasis added):

Elderly people suffering from dementia should consider ending their lives because they are a burden on the NHS and their families, according to the influential medical ethics expert Baroness Warnock.

The veteran Government adviser said pensioners in mental decline are “wasting people’s lives” because of the care they require and should be allowed to opt for euthanasia even if they are not in pain.

She insisted there was “nothing wrong” with people being helped to die for the sake of their loved ones or society.

The 84-year-old added that she hoped people will soon be “licensed to put others down” if they are unable to look after themselves.

*snip*

Lady Warnock, a former headmistress who went on to become Britain’s leading moral philosopher, chaired a landmark Government committee in the 1980s that established the law on fertility treatment and embryo research.

Your takeaway from this should be that the government doesn’t love you; it loves its statistics and five-year goals. When the money runs out, don’t be surprised if the government isn’t knocking on the door of your hospital room to let you know that your life is too expensive and must end. Those old people in England were the ones who funded that National Health Care service for decades. They believed in it. They trusted their government. And it killed them anyway.

Knowing all that, are you really willing to put your life in the hands of government bureaucrats?

The free market is the best way to bring healthcare quality up and prices down

The absolute best way to ensure top flight care and affordable prices is through the free market. And before you start saying “That didn’t work in America, which is why we needed Obamacare,” you need to understand that America hasn’t had a free market since WWII. It was then that the government placed salary caps on employers in a misguided effort to help fund the war effort. Prevented from giving high salaries to entice the best workers, employers began offering health insurance benefits as part of the salary package. This disconnected people from both the cost of insurance and the cost of medical care.

Employer provided health insurance is a lousy way to keep costs down. The insurance companies try to do it by stiffing doctors or hospitals, or denying insureds payment. That’s inefficient. The best way to control costs is to have patients shop around in a competitive market. If my insurance company is paying, it doesn’t matter to me whether my child gets her checkup by a reputable doctor who charges $60 or a reputable doctor who charges $80. It matters only if I pay that money. For basic medical care, the patient should be the first line of defense in cost control. To that end, President Trump is trying to make cost comparisons easier by forcing hospitals to break down and reveal costs (and maybe explain that $200 aspirin).

Incidentally, if individuals, not employers, purchased most health insurance, that would also control insurance costs. Even before the rigid complexities of Obamacare, individual healthcare also wasn’t really a free market. In California, insurers have hundreds of regulations that drive costs up, something that’s not the case in, say, Texas. Insurance companies also can’t compete across state lines, so consumers may be trapped in very expensive markets. Also, mandates about what insurance most offer mean blocking a free market that would allow a healthy young man to make a minimal payment for catastrophic insurance, while parents with young children could pay for a more complete plan to cover all the things that can go wrong with little kids. As it is, our current system makes everyone, including really old people, pay for fertility treatments.

By the way, if you’re worried about people with chronic conditions who often ended up uninsured before Obamacare, the marketplace could have helped that too. Just as everyone who buys car insurance knows that some portion of that insurance fee is going to cover uninsured motorists, a similar system could be established to enable poor risk patients to get insurance. When it comes to people who cannot afford insurance or have been denied it because of chronic conditions, a slight mark-up to create a fund for premiums in the free market is a hell of a lot easier than turning the entire healthcare system over to the government.

If you doubt me about the benefits of competition, dig into your desk drawer and drag out one of your flash drives. Take a good look at that useful little thing and think about this: On Amazon today, you can get ten 32 GB flash drives for $34.00 — or $3.40 per flash drive. What you probably don’t know if you’re under 35 is that, when flash drives first came out in the 1990s, their storage ability was measured by megabytes, not gigabytes, and their cost was in the hundreds of dollars. What brought quality up and costs down was competition, unimpeded by government mandates and other market perversions.

Conclusion

Bernie and all the other Democrat candidates are making a lot of promises to young people about socialized medicine, assuring them it can be funded on the cheap and that this “cheap” system will give everyone top flight medical care. They’re all lying or, at the very least, seriously confused. Ironically, if they were indeed demented, and were living under their proposed socialized systems, they’d all probably be denied medical care.

There is no such thing as a free ride. Absent a rich country funding your socialized medicine, a completely homogeneous population willing to play by the rules, and young adults who are constantly having more children who will also play by the rules, your socialized medicine system will always go broke.

America can’t look to another country willing to pay the costs and cannot count on a constantly burgeoning population of young people willing to pay it forward in exchange for an unreliable promise that they’ll get some care too. Indeed, we have an example of that problem right here at home: Almost within minutes of its creation, Obamacare started hemorrhaging money because old people use it but don’t pay for it, and young people don’t use it and are unwilling to pay for it.

In addition, wherever there is socialized medicine, there is bad care. Bureaucrats who face no competition are not interested in the quality of care. They’re interested in metrics such as the number of patients registered with a hospital (whether or not they get treated) or the best way to make the numbers about baby deaths look good (e.g., refusing to count fragile babies as “live births”).

So next time you hear someone say Bernie or any other Democrat candidate will improve American medical care by handing it over to the government, ask yourself — and your friend — whether there isn’t a better way.

(You can see the other posts in this series here, here, and here.)

Image credit: Detail of Bernie Sanders by Matt Johnson.

The post I don’t like Bernie because his “Medicare For All” plan is terrible for America’s health and economy appeared first on Watcher of Weasels.

Bernie wants to raise taxes and it’s going to hurt

In 2016, I wrote several posts for my I Don’t Like Bernie blog. With Bernie rising in the polls, this post revisits his terrible tax proposals.

The website I Like Bernie, But, created in 2016 and updated for 2019, tries to calm people’s fears about Bernie Sander’s socialist extremism.  It states questions reflecting concerns that people might have about Bernie, and then provides pithy little answers refuting those fears.

In a previous post, I addressed the myriad falsehoods, omissions, and misconceptions in the website’s assurance that Bernie isn’t a dangerous socialist, he’s a good socialist. This post addresses the misleading answer to a concern that “I heard he [Bernie] wants to raise taxes.”

Here’s what I Like Bernie, But…. has to say about Bernie and taxes:

That’s simply false. Here’s the truth:

To fund his proposed $97.5 trillion in spending over the decade after his election, Bernie must tax everybody and tax them hard.  This is not a Republican viewpoint.  Back in 2016, when Bernie’s goals were less grandiose, Vox, a internet media outlet known for its strong Progressive orientation, examined Bernie’s plans and found them wanting.

Dylan Matthews imagined how the Tax Code would look if Bernie is allowed to go forward with his plans to socialize medicine; make college free for everyonerevamp America’s infrastructure; have the government create jobs for young people, a ridiculous scheme that Milton Friedman destroys with a single question about spoonsexpand Social Security, a program that is already going broke and sucking vast amounts of money out of the federal budget; and a whole bunch of other, smaller programs. Before I get to his specific conclusions, though, let’s talk about the bigger picture.

The first thing you need to understand, before we even get to the numbers, is that if you imposed a 100% tax rate on every single “rich” person in America (from the super-rich to the pretty darn comfortable), you might be able to fund Bernie’s plans for a month or so.  Even if you followed  that up by then confiscating all the assets from these same “rich” people, you still wouldn’t be able to pay for even a fraction of Bernie’s plans.

Don’t believe me?  Check out this video made when the Occupy Protesters started demanding that the 1% pay for everything. As you’ll see, Bernie’s demands can’t exist in the real world:

If you don’t have time to watch this 9 minute video, you can get the same information from a clear and funny post entitled “Feed Your Family on $10 Billion a Day.”  Whether you watch the video or read the post, you will learn more about actual money than you will if you spent weeks following Bernie around listening to his economically ignorant statements about money and wealth.

After watching the video or reading the post, you will know with absolute certainty that “the rich” cannot fund Bernie’s grandiose plans.  That means that other people are going to be tapped for money — and you might be surprised at how far down the economic food chain that tapping goes.  Let’s go back to that Vox article (remember, this is a Progressive publication from 2016, when Bernie’s plans were slightly lower dollar), to see what even Left leaning out let has to say.

Matthews notes that Bernie likes to throw out big, conclusory answers when he’s asked where the money will come from for his plans:

And for every plan, he’s got an idea to pay for it. College? Slap a financial transactions tax on Wall Street. Infrastructure? Tax corporations on profits they earn abroad. Single-payer? Raise income and payroll taxes, and then a bunch of others too.

While Sanders tends to portray these as separate ideas with separate financing, I thought it’d be worth adding them up and seeing what the tax code looks like with all of them. I looked specifically at his changes to personal income, payroll, and capital gains tax rates.

What Matthews discovered when he “looked specifically” at Bernie’s tax changes is that all Americans will need to pay more taxes — often significantly more taxes from those who can least afford them — to finance Bernie Sander’s dream of a government that will provide everything for everybody.  For clarity’s sake, Matthews leads with a graphic showing that everybody will be paying marginal increases on their taxes, whether they can afford it or not (and keep in mind that this graphic is from 2016, not 2019):

There’s no doubt that those making more than $250,000 a year will bear the greatest burden under the new tax scheme:

Most taxpayers would see a single-digit increase in their marginal tax rate. People with taxable income below $250,000 would see an 8.8 percentage point increase.

But the very rich would see eye-popping increases in marginal rates: from 36.8 percent to 62 percent for people with taxable income between $250,000 and $413,350. The big change here is applying the Social Security payroll tax, which adds another 12.4 points.

For the very richest Americans, with more than $10 million in taxable income, Sanders’s proposal would produce a 77 percent marginal rate. That’s not unprecedented — under Dwight Eisenhower, the top income tax rate was 91 percent — but it’s higher than the top rate at any point since 1964.

If you’re wondering, there’s a reason that America did away with those top rates back in 1964:  High top rates don’t bring in more money.  The reality is that the rich are better than anyone at protecting their money from what they perceive as unreasonable income taxes.  They take it offshore, shelter it, hide it and, most importantly, refuse to invest it, leaving their wealth unavailable to the rest of the country for such useful things as business start-ups, employment, exploring innovative ideas, etc.

The clearest representation of the damage too-high taxes do to an economy is the “Laffer Curve,” which Art Laffer came up with more than 40 years ago.  It’s a simple premise:  If you make it too expensive for people to make money, they’ll stop making money.  Here’s a more comprehensive explanation:

As drawn, the Laffer Curve shows that at a tax rate of 0%, the government would collect no tax revenue, just as it would collect no tax revenue at a tax rate of 100% because no one would be willing to work for an after-tax wage of zero. The reason for this is that tax rates have two effects on revenues: one is arithmetic, the other economic. The arithmetic effect is static, meaning that if rates are lowered, the tax revenues per dollar of tax base will be lowered by the amount of the decrease in the rate, and vice versa for increasing tax rates. In other words, this is what happens when a hypothetical 1% tax collects $1 million, so people assume that a 2% tax would collect $2 million… and a 5% tax would collect $5 million. Likewise, under the same scenario people would similarly assume that a .5% tax rate reduction would collect only $500,000.

And here’s a helpful visual:

That’s all very easy to say in theory, but how does the Laffer Curve really work in fact?  Well, it turns out that, when put to the test of real world economics, the Laffer Curve performs as predicted:

Solid supporting evidence came during the Reagan years. President Ronald Reagan adopted the Laffer Curve message, telling Americans that when 70 to 80 cents of an extra dollar earned goes to the government, it’s understandable that people wonder: Why keep working? He recalled that as an actor in Hollywood, he would stop making movies in a given year once he hit Uncle Sam’s confiscatory tax rates.

When Reagan left the White House in 1989, the highest tax rate had been slashed from 70 percent in 1981 to 28 percent. (Even liberal senators such as Ted Kennedy and Howard Metzenbaum voted for those low rates.) And contrary to the claims of voodoo, the government’s budget numbers show that tax receipts expanded from $517 billion in 1980 to $909 billion in 1988 — close to a 75 percent change (25 percent after inflation). Economist Larry Lindsey has documented from IRS data that tax collections from the rich surged much faster than that.

Reagan’s tax policy, and the slaying of double-digit inflation rates, helped launch one of the longest and strongest periods of prosperity in American history. Between 1982 and 2000, the Dow Jones industrial average would surge to 11,000 from less than 800; the nation’s net worth would quadruple, to $44 trillion from $11 trillion; and the United States would produce nearly 40 million new jobs.

Critics such as economist Paul Krugman object that rapid growth during the Reagan years was driven more by conventional Keynesian deficit spending than by reductions in tax rates. Except that 30 years later, President Obama would run deficits as a share of GDP twice as large as Reagan’s through traditional Keynesian spending programs, and the economy grew under Obama’s recovery only half as fast.

And to give a current spin to the blessings of the Reagan economy, just look at what happened to the American economy under Trump’s tax reform:

The U.S. Bureau of Labor Statistics released its state-level jobs report today for the Month of November [2019], providing 23 months of employment information to track how the Tax Cut and Jobs Act may have shaped job growth trends across America. The results strongly suggest that the 27 low tax states (with average SALT deductions below $10,000 in 2016) are significantly outperforming the 23 high tax states and the District of Columbia (where filers claimed more than $10,000 in SALT deductions).

From December 2017 to November 2019, the low tax states added nonfarm payrolls at a rate 93.8% greater than the high tax states. Nonfarm jobs include those in the government sector. Limiting the scope of job growth to the private sector, where small business owners’ decisions on when and where to grow their businesses are directed affected by the tax code, shows and even larger job creation advantage for the low tax states, with a 97.9% higher rate of job growth in the past 23 months. Capital-intensive manufacturing shows an even larger disparity, with the rate of manufacturing jobs growing 3.3% in the low tax states compared to 1.3% in the high tax states, a massive 151% disparity in favor of the low tax states. In the past 12 months, the difference in manufacturing job growth is an astounding 1,209% advantage in favor of the low tax states. This may be because manufacturing facilities take longer to get up and running than do other sectors such as retail, with the effect of the tax cut being slower to manifest in this sector.

The table below shows the percentage of jobs added in three categories, nonfarm, private sector, and manufacturing over three time periods, since President Trump was sworn in in January 2017, since the passage of the tax cut in December 2017, and over the past 12 months.

All of this boils down to a single point:  If Bernie’s tax plan goes into effect, over time there will be less money available to the government, not more.  People will earn less, create less, innovate less, spend less, and invest less.  It just won’t be worth it.

For the first year or two of the new, higher tax rates, the rates will look successful because they’ll sweep in money already created through investing, earning, innovation, etc.  After that, though, the tax revenues will slide steadily as the economy becomes more and more sluggish.

I assume that, at this point, some people will point out that the real benefit of Trump’s economy is only for those rich enough to invest in the booming stock market. That’s not true, and you can see why if you compare the Trump economy to the Obama economy.

During the Obama years, it’s true that the stock market did grow. However, if you were really paying attention, you might have noticed that the boom was entirely unrelated to job creation and other signs of a thriving economy.

What’s happened is that, in a high regulation, high tax, unstable environment, the rich, rather than investing (and risking) their money in job and wealth creation, were just storing it in the stock market, waiting for a sign that investment will be less risky.  For everyone else — that is, for businesses and their employees — stagnation was the name of the game, whether in the number of jobs available or in the salaries people could earn.

Compare this to Trump’s low tax and fewer regulations economy, and you can see that the stock market rise has been accompanied by rising wages and more available jobs. Most importantly, the greatest wage benefit from Trump’s economy has flowed to the lowest wage earners — that is, it’s not just the stock market investors making bank.

If we were to reverse the Trump gains and embrace Bernie’s proposed capital gains tax (going from an already high, compared to Europe, rate of 23.8% to a new high of 64.2% at the very top), most investment would stop altogether.

Again, don’t believe me (a conservative); believe Vox, a Progressive publication:

The Sanders campaign estimates they’ll earn $92 billion a year from taxing capital gains the same as wages. But there’s reason to think they’ll actually lose revenue.

One thing that happens when you increase the capital gains rate is that people stop selling assets — and thus realizing gains on capital that can be taxed — as frequently. That means there’s a point beyond which raising the capital gains tax would reduce sales so much that revenue actually falls.

Note that this is a very different question from whether taxing capital gains at a high rate hurts economic growth. Many economists think it does, but that effect would reduce revenue by lowering the price at which assets are sold, not making them less likely to be sold in the first place. The latter is a different effect whose existence is much less controversial.

By the way, if you’re tired of hypotheticals and what to see what it looks like in places where Bernie’s financial plans have already been put into effect, look around the world:  In the years after World War II, Europe looked like a strong economy that also managed to be socialist. What this ignored was that (a) Europeans were having babies to repopulate after World War II; (b) America paid for Europe to rebuild its infrastructure; and (c) America paid for most of Europe’s defense costs. Going into the 21st century, though, Europe had a declining birth rate, the infrastructure benefit had gone away with time; and, with the end of the Cold War, America stopped pouring so much money into European defense and the European economy.

So it is that, in the 21st century, most of Europe is having economic problems thanks to the withdrawal of American Cold War funding, the 2008 recession, the dramatic drop in birth rates, and the influx of immigrants who drew on the system without funding it, all of which made it impossible for European countries to continue what was essential a Ponzi scheme, whereby they kept taxing the up-and-coming generation of workers to pay for the perks accorded older people. Add to this hyper-regulation from the EU, which makes conducting business very difficult, and you can see why Europe’s system isn’t so admirable anymore.

An even better example of what happens when you implement Bernie’s tax policies is Venezuela, which had such a rapid decline after socialization that you can see the Bernie-style problems playing out before your eyes.  Venezuela implemented Bernie’s socialism a few years ago and went from being one of the most prosperous Latin American nations (thanks to oil revenue) to being flat-out broke, with shortages of everything from food to toilet paper to (ironically) oil.

Government manages money very badly.  When you have your own money, you presumably worked hard for it and depend a great deal on it. You’ll therefore be careful with it, and quite possibly want to do things that make you earn more of it.

Government is different.  The government bureaucrats who are making decisions about and spending your money didn’t earn that money.  They won’t be affected if they spend it unwisely.

Worse, when they run out of your money thanks to unwise management, these bureaucrats don’t have to do what ordinary people do, which is either to cut spending or work even harder to pay bills. Instead, they just have to demand more from you, since they have the vast punitive power of the government at their back to take that money from you.  (Robin Hood, incidentally, didn’t steal from the rich; he stole from the tax collectors, and gave the money back to the taxpayers.)

And one final point about those government bureaucrats:  As a friend reminded me, F. A. Hayek’s The Road to Serfdom makes the point that it doesn’t matter how good, honest, and caring the manager is.  There is simply no way for one person or government department to accumulate enough knowledge about what’s going on in the economy for that person or department to make good decisions.

Even with powerful computers and all the technology of the 21st Century, the knowledge needed to make smart economic decisions is so diffused through the country and the population that shortages WILL occur….and then the attempt to deal with them will make things worse, and so on and on, ad infinitum.

Here’s the bottom line:  Governments do not create wealth.  The only way they get money is to take it from people who have earned it.  They then hand that money out to favored constituencies, picking winners and losers as they go.  Invariably, because government is slow, inefficient, and cares more about reward friends and punishing enemies than profits and losses, the money dribbles away, having enriched a few and impoverished many.

At the end of the day when the government takes it upon itself to be the money manager — to suck up everyone’s wealth through constantly increasing taxes, and then itself to run the businesses and make the calls — everyone ends up poorer.  Just ask the people in Venezuela.

(You can find the first post in this series, about why it’s a bad thing that Bernie is a socialist, at Bookworm Room or at I Don’t Like Bernie, Because.)

Image credit: Detail of Bernie Sanders by Matt Johnson.

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Bookworm Beat 9/28/19 — the Ukraine and climate change illustrated edition

When politics get stupid, as they did last week with climate change and Ukraine whistle blowers, the memes get really good — and I’ve got lots of them.




Pennywise Adam Schiff Ukraine hoax






























































And as a bonus, Mini-AOC is back with back with a wonderful parody:

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To too many, a Bernie life takeover is a GOOD thing

Sadly, not only Leftists, but beleaguered working and lower middle class voters will like intrigued the Bernie promise to make their lives safer and easier.

Monica Showalter of American Thinker, is one of the most astute political bloggers out there. Nevertheless, I believe her conservative outlook caused her to make a conceptual error. Today she wrote a short post about an Axios list of the things Bernie wants to bring under government control — and Showalter thinks that Axios published the list because it’s concerned about Bernie’s proposed power grab:

In a startling Axios summary list called “Bernie Sanders’ 2020 plan to restructure your life,” Axios publisher Jim Vanderhei (and Juliet Bartz), are sounding the alarm about the nightmare scenario of a potential Bernie Sanders presidency.

The piece was featured in Mike Allen’s widely read Top 10 — at the top. It’s a piece that looks like it belongs more at Issues & Insights than center-left Axios. Axios warns that Sanders is surging in the polls and influencing other Democratic candidates with his ideas and they don’t sound happy.

I have to disagree with Showalter. First of all, looking at the list from the purely Proggie viewpoint, I think it’s a very happy list. In the chart below, the left-hand column quotes verbatim from that Axios summary. The right-hand column has the reaction from the average hard-core, college-educated Leftist.

[table id=3 /]

But of course the base is going to be happy. The more worrisome thing is that, unlike Showalter, others might find it appealing too. That is, like Axios writers, they’ll see the ten items as either positives or net neutrals. Here’s another chart looking at the same list from the loosey-goosey, not-very-political working class or lower-middle class voter’s view.

[table id=4 /]

To reiterate, I think Showalter is shocked by the reach of Bernie’s proposals. I’m not sure non-conservative Americans will be. When the Democrat candidates stand on the stage and talk about open borders and paying for illegal health care, ordinary Americans get queasy. When these same candidates promise to take away all pain and worry, they may start to line up with their hands held out.

Back in 2016, I put together a blog with some sustained attacks on Bernie’s policies. I recommend checking it out now. It’s an effort to remind people that Bernie’s policies, nice though they sound, invariably pave the way to despair and death.

Image credit: Bernie Sanders by DonkeyHotey.

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Bookworm Beat 6/30/19 — the Democrat debates illustrated edition

The Democrat debates are the gift that just keeps giving — for Trump and his supporters. Plus a lot of other pointed and funny posters and cartoons.



























































And lastly, Trump shows that he understands war: You avoid it if you can, but if you can’t, you fight to win — and you let your enemy know your goal:


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Bookworm Beat 6/15/19 — the no news is good news illustrated edition

Scott Adams points out that life is so good under Trump that there’s no news. Since this illustrated edition has lots of silly stuff, I believe he’s right.





Trump Candace Owens Press Secretary Illustrated Edition


























































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Bookworm Beat 4/30/19 — the New York Times Antisemitism illustrated edition

As the posters in my illustrated edition show, when it comes to New York Times antisemitism, it’s 1933 all over again (plus many other interesting posters).




New York Times antisemitism













































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Bookworm Beat 4/25/19 — the Joe Biden runs for president illustrated edition

When it’s Joe Biden announcing his candidacy for president, the memes just write themselves. No wonder I’ve got a huge collection of Biden memes for you.

Biden


























Biden gropes




























As an aside, for those who will inevitably compare Joe’s groping to Trump’s “grab ’em” remark, I don’t recommend going there.

First, I think there’s a very good argument to be made that Trump was merely engaging in locker room boasting — not to mention telling the truth about the fact that there are women who welcome attention from millionaires, Democrat presidents, movie stars, etc.

Second, while there’s endless video proof of Biden’s “hands-on” approach, the only women who came forward about Trump proved to be hard-line Hillary supporters with narratives about as reliable as Blowsey-Fraud’s accusations against Kavanaugh.

Third, what’s really wrong about Biden isn’t the touching women, but his pawing all those children. That doesn’t and shouldn’t ever get a pass.

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Bookworm Beat 4/22/19 — the lunatic Leftists illustrated edition

Honestly! Every time you think Leftists can’t take their socialist, identity politics, intersectional, American-hating madness any further . . . they do.


























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Bookworm Beat 4/16/19 — the sanctuary cities edition and a parable

Trump’s plan to send illegal aliens to sanctuary cities is politically brilliant. The internet had fun with it along with a lot of other issues of the day.

sanctuary cities illegal immigration invasion




















































I got the following parable in an email and thought it clever enough to share:

THE ANT AND THE GRASSHOPPER

This one is a little different … Two Different Versions … Two Different Morals

OLD VERSION

The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.

The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away.

Come winter, the ant is warm and well fed.

The grasshopper has no food or shelter, so he dies out in the cold.

MORAL OF THE OLD STORY:

Be responsible for yourself!

MODERN VERSION

The ant works hard in the withering heat and the rain all summer long, building his house and laying up supplies for the winter.

The grasshopper thinks the ant is a fool and laughs and dances and plays the summer away.

Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while he is cold and starving.

CBS, NBC, PBS, CNN, and ABC show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food. America is stunned by the sharp contrast.

How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so?

Kermit the Frog appears on Oprah with the grasshopper and everybody cries when they sing, “It’s Not Easy Being Green”

Occupy the Anthill stages a demonstration in front of the ant’s house where the news stations film the Black Lives Matter group singing, “We shall overcome.”

Then Reverend Al Sharpton has the group kneel down to pray for the grasshopper while he damns the ants. He later appears on MSNBC to complain that rich people do not care.

Former President Obama condemns the ant and blames Donald Trump, President Bush 43, President Bush 41, President Reagan, Christopher Columbus, and the Pope for the grasshopper’s plight.

Nancy Pelosi & Chuck Schumer exclaim in an interview on The View that the ant has gotten rich off the back of the grasshopper, and both call for an immediate tax hike on the ant to make him pay his fair share.

Finally, the EEOC drafts the Economic Equity & Anti-Grasshopper Act retroactive to the beginning of the summer.

The ant is fined for failing to hire a proportionate number of green bugs and, having; nothing left to pay his retroactive taxes, his home is confiscated by the Government Green Czar and given to the grasshopper

The story ends as we see the grasshopper and his free-loading friends finishing up the last bits of the ant’s food while the government house he is in, which, as you recall, just happens to be the ant’s old house, crumbles around them because the grasshopper doesn’t maintain it.

The ant has disappeared in the snow, never to be seen again.

The grasshopper is found dead in a drug related incident, and the house, now abandoned, is taken over by a gang of spiders who terrorize the ramshackle, once prosperous and peaceful, neighborhood.

The entire Nation collapses bringing the rest of the free world with it.

MORAL OF THE STORY:

Be careful how you vote in 2020.

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