Robert Samuelson's Fudgy Numbers

You can count on two things from Robert Samuelson: Arguments that any amount of social spending is too much, and arguments that any amount of military spending is too low. I say that while accepting that there may be some social spending programs that Samuelson would maintain at present levels, or perhaps even expand, and some military programs that he might cut, but he's not interested in writing about those issues. In a big picture sense, he dislikes social spending, while depicting military and war spending as easily afforded pocket change.

It thus comes as no surprise that Samuelson is adamantly opposed to the proposed cuts to the Pentagon budget and the size and scope of the U.S. military. Predictably, his outrage is expressed largely in the abstract, and he chooses to completely ignore the issues of waste or of out-dated or redundant weapons programs. Instead he presents dubious arguments and fudges the numbers. It's difficult to believe that he could hold a straight face while writing his opening paragraph:

The crisis in Ukraine reminds us that the future is unpredictable, that wars routinely involve miscalculation and that brute force — boots on the ground, bombs in the air — counts. None of these obvious lessons seems to have made much impression in Washington, where the Obama administration and Congress continue their policy of defunding defense and reducing the United States’ military power.

I would love for Samuelson to explain to his readers how much additional U.S. military spending it would take to deter Russia from acting in what it perceives to be its best interest, and exactly how that spending would have an impact on Putin's decision-making. The issue is not that we can't counter Russia in a conventional war. The issue is that Russia is a nuclear power, and even if a war to liberate Crimea were somehow (magically) contained to that region and did not involve nuclear weapons, the human cost of such a war would be massive. Samuelson is more than smart enough to know that a $400 trillion U.S. military budget would not have deterred Russia. What does it tell us that his opening position suggests otherwise?

Next up, Samuelson whines that as military spending drops, Social Security spending increases. First, as should be obvious to anybody who claims to be a writer on economic issues, the two are not related. It is possible to have both high Social Security spending and high military spending. Second, the funding mechanisms are different. Social Security is designed to be self-funding. But for Republican obstructionism, as cheered on by the "Burn it down" position taken by Beltway pundits such as Samuelson, we would almost certainly have seen a reform bill pass early in Obama's tenure that would have reduced the measure of inflation for future Social Security benefits and balanced the books into the very distant future. Third, if Samuelson can do math, he knows that Social Security and Medicare spending are closely tied to the number of elderly people in our society, and he should have no trouble figuring out that the problem is not so much that the spending is "out of control" as it is that Baby Boomers are reaching retirement age. Fourth, the reasons to maintain Social Security and Medicare have absolutely nothing to do with the reasons our nation might have to modify its defense budget.

Samuelson next claims that there are two reasons why the U.S. has a military: to deter conflicts and to defend national interests. On the issue of deterrence, Samuelson argues that any large military budget cuts "symbolically undermines deterrence." What a wonderfully convenient argument for him: We can never make more than token cuts to the military, as to do so would send the message to the world that they can engage in military conflicts. Perhaps Samuelson is still clinging to the false hope that the end of the Cold War somehow meant an end to war, as it's difficult to find a region in the world where nations seem particularly disinclined to engage in warfare when they believe it's in their best interest. One wonders, what military conflict does Samuelson believe the U.S. is presently deterring (perhaps a Chinese invasion of Taiwan, or a North Korean invasion of South Korea?) and why does he imagine that the military cuts will even slightly affect deterrence.

The best examples Samuelson can muster are of China and Iran:

The United States’ military retrenchment won’t make China’s leaders less ambitious globally. (China plans a 12 percent increase in military spending for 2014; at that pace, spending would double in six years.) Nor will it dampen Iran’s aggressiveness and promote a negotiated settlement over its nuclear program. Probably the reverse. Diplomacy often fails unless backed by a credible threat of force.

If the best examples Samuelson can muster are that, if military spending is cut, China may go on an invasion spree and Iran will... do whatever it is that Samuelson imagines that they would do differently... you can see the weakness of his position. When you describe the current military actions taken by China, how can you suggest that those actions would be deterred if only we didn't reduce military spending from current levels? As for the notion that the U.S. would lack credibility to pose a military threat to Iran, post-cuts, that's absurd on its face. It's another assertion that Samuelson can't possibly believe.

Samuelson mentions that China is increasing its military spending by 12%, to support a ridiculous projection that at that rate they could double military spending in six years. His source tells us what such a theoretical doubling would mean:

Although the rise in the defense budget in the past three years has surpassed GDP growth, the share of military spending in China's GDP stood at less than 1.5 percent last year, well below the world average of 3 percent, Yin said, citing statistics.

A report released by London's International Institute for Strategic Studies showed the United States remained the world's biggest defense spender in 2013, with a budget of 600.4 billion U.S. dollars.

Robert Samuelson has been beating the military spending drum for a very long time. Back in 1997, he was complaining that 1996 military spending was a mere 3.6% of GDP. In 2012, by the CIA's measure, military spending was at 4.35% of GDP. While that number may decrease to 2.7% by 2017, a target that was included in the 2013 bipartisan budget deal, U.S. military spending would continue to massively exceed China's expenditure.

Samuelson's drum beating about China also belies his suggestion that military strength is inexorably tied to the percentage of GDP a nation devotes to military spending. He's depicting a nation that spends a mere 1.5% of its GDP on its military as the leading threat to the world military dominance of the United States. That should suggest a few things to Samuelson, including the possibility that the fact that the size of a nation's economy factors complicates the question of how military spending should be measured and that, even in relation to his beloved military spending, the law of diminishing returns comes into play.

Samuelson also glosses over the fact that nations enjoy a carry-over from past military spending. It's not the present level of investment that frees Russia to support Syria, or act military in nations like Georgia, Czechoslovakia and Chechnya. It's the legacy of its superpower status and its nuclear arsenal. Russia may not have the power it once held to project its might into the far reaches of the globe, but it has made clear that it can and will act to defend its perceived interests no matter what the rest of the world may believe. In other words, despite Samuelson's ominous warnings, there's no reason to believe that the proposed budget cuts would devastate the status of the U.S. military as the world's leading military power, or the status of the U.S. as the world's only remaining superpower.

Russia’s aggression in Ukraine raises the prospect that a sizable number of U.S. troops might be stationed in the Baltic nations or Poland. All belong to NATO; all must now feel more threatened by Russia.

While noting that this is fear-mongering of the worst kind, and that Russia understands the difference between acting against a NATO member state and a non-aligned state, once again if that threat is being felt the feeling is occurring at the end of a long run-up in military spending. If current spending levels aren't sufficient to keep nations from being afraid of Russia, then there's really nothing that we can do to make that fear go away.

A question Samuelson doesn't ask, let alone address, is whether it's even our nation's proper role to try to ensure that nations that are not our treaty partners are not in fear of military action by a neighboring nation. Samuelson seems to love the idea of the U.S. as a global policeman, no matter what the price, but I see little sign on whether he's reflected on whether that's an appropriate role for the U.S., or whether other nations should take a greater role in paying for and providing their own regional security. If it's crucial to Europe that the Baltic States never fear Russia, no matter how remote the possibility of actual military action, why should it be the U.S. that foots most or all of the bill for chasing away the bogeyman? And if Samuelson believes the statement he endorses at the end of his column, "the world has gotten no less dangerous, turbulent or in need of American leadership. There is no obvious peace dividend as was the case at the end of the Cold War", why does he imagine that the bogeyman will vanish even if we continue to spend at today's inflated levels?

It should also be noted that Samuelson plays the game that any cuts in military spending must be permanent. He disregards the fact that every time this nation has felt a need to increase military spending, those increases have occurred. The only budget or spending bill that really matters is the one passed by the current Congress, as the next Congress will remain free to institute its own spending priorities. Samuelson, I suspect, is aware of that fact, but he chooses not to acknowledge it because, as with his other omissions, he understands that once people realize that his rending of clothes over future military spending is a performance, and that if the circumstances require Congress will do what it has always done to maintain the military strength of the United States -- increase military spending.

David Brooks and the Missing Link

A few days ago, I suggested that when David Brooks fails to link to something that he is referencing and is easily available online, he's probably hiding something. Here we go again:

Spending on domestic programs — for education, science, infrastructure and poverty relief — has already faced the squeeze and will take a huge hit in the years ahead. President Obama excoriated Paul Ryan for offering a budget that would cut spending on domestic programs from its historical norm of 3 or 4 percent of G.D.P. all the way back to 1.8 percent. But the Obama budget is the Ryan budget. According to the Office of Management and Budget, Obama will cut domestic discretionary spending back to 1.8 percent of G.D.P. in six years.

No link to that 1.8 percent figure? You'll find it here, on page 30, with the explanation,

Discretionary spending levels other than overseas contingency operations reflect the budget authority caps under the Budget Control Act of 2011. The split of discretionary spending between security and nonsecurity after 2013 is based on increasing budget authority in each category by the growth rate in the aggregate discretionary cap.

Perhaps Brooks somehow missed it, but right now neither party is keen on implementing the automatic tax cuts that are scheduled to occur under the deficit reduction sequestration provisions of that Act.

Brooks also describes CBO projections,

The current budget calls for a steep but possibly appropriate decline in defense spending, from 4.3 percent of G.D.P. to 3 percent, according to the Congressional Budget Office.

The 3% number apparently comes from here, page 74, for the year 2022:

Most discretionary appropriations for 2013 through 2021 are constrained by the caps and automatic enforcement procedures put in place by the Budget Control Act; for 2022, CBO assumed that such appropriations would equal the 2021 amount grown at the rate of inflation. Given those appropriations, discretionary spending would decline from 8.4 percent of GDP in 2012—which is already below the 2011 level of 9.0 percent—to 5.6 percent in 2022 (see Table 5-1).

In reciting the 3% figure as "possibly appropriate", Brooks is expressing some level of indifference to a cut to that level. His professed fear is that "defense planners are notoriously bad at estimating how fast postwar military cuts actually come", whereas his ability to project future Medicare cost increases verges on perfection (never mind that he appears to be unaware that Medicare spending growth has been lower than projected for the past three years) - and thus at some point in the future the military budget might be cut below the 3% (that results from the sequester, and that both parties appear intent on raising) in the CBO projection. Also, there's an inherent tension between arguing that the 3% figure is "possibly appropriate" and Brooks' overall thesis that the President's purpose in appointing Chuck Hagel is to have him "supervise the beginning of America’s military decline".

First it's the OMB, then the CBO, and then over to the GAO. David Brooks writes,

Keep in mind how brutal the budget pressure is going to be. According to the Government Accountability Office, if we act on entitlements today, we will still have to cut federal spending by 32 percent and raise taxes by 46 percent over the next 75 years to meet current obligations. If we postpone action for another decade, then we have to cut all non-interest federal spending by 37 percent and raise all taxes by 54 percent.

The GAO writes,

One measure of the challenge over the long term is the “fiscal gap.” The fiscal gap represents the difference, or gap, between revenue and noninterest spending over a certain period, such as 75 years, that would need to be closed in order to achieve a specified debt level at the end of the period. From the fiscal gap, one can calculate the size of action needed—in terms of tax increases, spending reductions, or, more likely, some combination of the two—to close the gap.

For example, to keep debt held by the public as a share of GDP in 2086 from exceeding its level at the beginning of 2012 (roughly 68 percent of GDP) in our Alternative simulation, the fiscal gap is 8.3 percent of GDP (see table 1). This means that revenue would have to increase by 46 percent or noninterest spending would have to be reduced by about 32 percent (or some combination of the two) on average over the 75-year period. Even more significant changes would be needed to reduce debt to lower levels.

Brooks says "and", the GAO says "or"... which means Brooks is doubling the size of the problem. Were Brooks to resort to the obscure news source known as the "New York Times", he would find an explanation by Bruce Bartlett of the GAO's projection:

As the table shows, spending is not out of control. Entitlement programs like Social Security and Medicare are rising gently as the baby-boom generation retires. All other spending, including that for the military and domestic discretionary programs, falls – with the notable exception of interest on the debt. Interest rises sharply as the deficit rises, principally because the G.A.O. assumes that revenue will not be permitted to rise above its historical average – as Republicans continually insist....

That leaves interest on the debt as the principal driver of long-term spending and deficits. As the G.A.O. projections show, net interest rises from 1.4 percent of gross domestic product this year to 3 percent in 2020, 4.9 percent in 2030 and continues rising astronomically thereafter as interest accrues on the bonds previously sold to pay interest on the debt.

Interest rises from 6.1 percent of the federal budget in 2012 to 12.9 percent in 2020, 21 percent in 2030 and eventually reaches 59 percent if current projections are maintained through 2082, the last year in the G.A.O. analysis. As a share of the deficit, interest would rise from 19.2 percent this year to 62 percent in 2020. In the long run, virtually all of the deficit is accounted for by interest on the debt.

Bartlett asserts that the way to avoid that enormous increase in the cost of interest is for the present generation of Republicans to stop preventing government from paying for itself. Simply put, the GAO report does not support Brooks' "out of control Medicare" position, but is the result of out-of-control borrowing forced by Republican insistence that government not be adequately funded. If you don't want the national debt to grow and you're not willing to make the cuts to government expenditure necessary to avoid growing the debt, you have to increase revenues.

On the positive side, Brooks seems to have given up on his peer group's historic insistence that the problem is a single program called "medicareandsocialsecurity", and is now focused on Medicare. On the negative side, he's not being honest about what his sources actually say, and he's making what is fundamentally an appeal to fear. The OMB and CBO reports are only relevant if the Republicans refuse to work out a different deal, such that the automatic cuts are not changed. The GAO projection, which is half as dire as Brooks purports, indicates that the growth of Medicare costs remains a significant concern but that the larger concern is that continued, long-term deficit spending will cause the amount the U.S. has to pay to service the debt to snowball. This?

Chuck Hagel has been nominated to supervise the beginning of this generation-long process of defense cutbacks. If a Democratic president is going to slash defense, he probably wants a Republican at the Pentagon to give him political cover, and he probably wants a decorated war hero to boot.

All the charges about Hagel’s views on Israel or Iran are secondary. The real question is, how will he begin this long cutting process? How will he balance modernizing the military and paying current personnel? How will he recalibrate American defense strategy with, say, 455,000 fewer service members?

Fear-based nonsense. First (granting that he's younger than he looks), if Brooks recalls his history, back in 2000 candidate Al Gore was proposing greater military spending than candidate George W. Bush, and Donald Rumsfeld was predicted to have been chosen to oversee a reinvention of the military into a smaller, more nimble force. How did that turn out, again? Second, even Brooks knows that Hagel will not be overseeing a reduction in the active duty armed forces from 1.4 million down to @1 million. Brooks doesn't explain his number, but I expect he's extrapolating from the financial figures from the CBO - a reduction "from 4.3 percent of G.D.P. to 3 percent" over eight years, or 30% over eight years, with 30% of 1.4 million being 4.2 million... that's in the same ballpark.

Never mind that Hagel is unlikley to be Defense Secretary in eight years, that the scheduled defense cuts underlying that projection are not going to happen, that a 30% cut does not prevent prioritization (it would not be 30% of each line item, across the board), that Congress controls the purse strings, that neither this Congress or the President can bind the hands of their successors, or that Brooks himself has suggested that the net result (of the cuts that won't actually occur) may be an appropriate level of defense spending. "The sky is falling - we're turning into Europe and it's going to happen this month."

A still theoretical 30% cut in military spending is not going to "turn us into Europe."

What's missing from Brooks' column? A solution. Brooks implicitly rules out means testing when he argues that a tax increase on the wealthy is "barely a wiggle on the revenue line and does nothing to change the overall fiscal picture". Does he endorse the Democratic initiative to attempt to identify the most effective treatments for medical conditions, why trying also to identify and eliminate costly treatments that are either no more effective than less costly counterparts or that don't work at all? If so, he should write a column criticizing his own political party for its demagoguery about "rationing" and "death panels". Does he want to arbitrarily cap Medicare expenditures and replace the program with vouchers? If so, he's afraid to say so. Does he simply want to reduce compensation levels for doctors, hospitals, and medical equipment suppliers? What's left?

The Top Issues That Romney Should (But Won't) Address

If Mitt Romney wants to move the campaign from the non-serious to the serious, to move from fabricated attacks to substantive discussion, ere are some issues I would like to see him address:

1. Climate Change: Let's skip past the B.S. and acknowledge the facts. The world is getting hotter and all of the world's nations are going to be affected, some far more seriously than others. What policy should the U.S. take in response to climate change, and if you propose anything but inaction how will you lead the world on the issue?

2. Trade Deficits: If our nation runs a trade deficit, that deficit must be "paid for" with some combination of government debt or private debt. Do you believe that foreign nations will, in effect, subsidize our consumers forever, or do you believe that the trade deficit matters and should be reduced? If you want to reduce trade deficits, what steps will you take to bring about a reduction? If not, how do you propose that our nation's position in the global marketplace can be sustained over the long-term?

3. Terrorism: Since George W. Bush left office, the approach to the "war on terror" has shifted from starting large, traditional wars in nation states to launching small commando raids and drone strikes around the world. While a good case can be made that the new approach is the better one for combating groups planning terror attacks against the U.S., its interests and allies, the lack of Congressional oversight over the choice of targets and use of drones creates serious questions about the proper scope of executive power, while also raising serious resentment against the U.S. in areas where drone strikes are occurring. What will you do to address those concerns, and what will be your policy on the selection of targets (including U.S. citizens) and whether and when to order commando raids or drone strikes on selected targets?

4. Military Spending: Do you believe that there is any waste, fat or excess in the U.S. military and defense budgets? If not, please make the economic case for our present weapons systems, actual and under development, vast network of military bases, and other expenditures that come under frequent attack, even from within your party? If so, what programs would you modify or cut? What military expenditures do you deem the most crucial to the nation's interest, and which do you deem to be the least? How would you search for efficiencies and, once identified, how would you implement more efficient practices or policies? How will your policies, one way or the other, affect military spending in present and future budgets? How will they affect national defense, as well as overseas military commitments and activities? Are there any world conflicts in which you would increase or decrease a U.S. military role and presence and, if so, which ones, for what purpose, and at what cost?

5. Russia and Eastern Europe: What are your policies on our relations with Russia and Eastern Europe. Over the course of your campaign you have proposed a number of policies that would antagonize Russia, and have criticized Obama Administration policies on U.S.-Russian relations that appear to have significantly improved our nation's relations with Russia. What will be your approach to Russia, issue-by-issue, and what impact do you expect those policies to have on U.S.-Russian relations or Russian cooperation with U.S. political, military and economic goals? For example, allowing former Soviet Bloc nations to join NATO, whether or not such a move might be justified for other reasons, or implementing ballistic missile defense technologies on Russian's border, could cause Russia to cease its cooperation with and facilitation of U.S. military efforts in Afghanistan, to cooperate with sanctions against nations like Iran, or otherwise act in a manner contrary to U.S. goals and interests. What balances will you draw, and why do you believe they will work?

6. Banking Regulation: Even after the near-collapse of the financial industry and the government bailouts of banks, some of the nation's (and world's) largest financial institutions have continued to engage in acts that range from incompetent to reckless to criminal. What regulations would you support to prevent a recurrence of a financial industry collapse? How can you guarantee that the U.S. taxpayer will never again be asked to bail out bankers - let alone before every penny of shareholder and bondholder money has been extracted to try to solve the bank's problem without moral hazard?

7. Health Care: If you truly are of the position that the Affordable Care Act is an atrocity that must be repealed, despite its remarkable similarity to the plan you signed into law as governor of Massachusetts, exactly what do you propose to implement in its place? One would expect a business leader to look at other companies and identify possible ways to increase efficiency or save costs - would you look to other approaches to health insurance in the industrialized world, and bring their best elements to the U.S.? If so, which ones? If not, why not?

   What concrete proposals can you share to address healthcare costs and healthcare inflation? Should the government have a policy on end of life care and, if so, what should that policy be? If not, how do you propose to get health care costs in check without taking a position on the leading contributor to that cost?

8. Employment and Wages: Do you believe that a strong middle class is important to American Society? Are you concerned that middle class wages are stagnant, middle class jobs are disappearing, and middle class workers are feeling enormous financial pressure? If so, what policies do you propose that will help improve the financial well-being of the middle class and expand the pool of middle class jobs? If not, why not?

9. National Debt: As a businessman, you did not shy away from debt. Quite the opposite, one of your tactics was to acquire companies with low debt and then significantly increase their debt load. If you would add debt to a company to invest in infrastructure or extract profits for your investors, aren't you confirming that the problem is not the debt itself but the cost of that money? As head of a private equity firm, if you acquired a business enterprise is able to borrow at extremely low rates, rates that with inflation amount to a break-even or possibly even a negative interest rate, what would you do? Would you apply different principles as President, refusing to borrow what amounts to "free money" in a time of crisis to invest in the nation's infrastructure at a time when such an investment could significantly boost employment and future competitiveness? If so, why?

10. Deficit Spending: You have argued against deficit spending, even in a time of severe economic crisis, but you have not proposed a credible plan for balancing the budget. You have instead endorsed a budget that cuts unspecified domestic spending, cuts taxes for the wealthy and for corporations, and as a result increases the budget. If you in fact are concerned about deficit spending, exactly what cuts will you made to reduce domestic spending? Will you make any cuts to military spending and if so, exactly what will you cut? If it is necessary to raise taxes to balance the budget, what taxes will you raise and by what amounts?

11. Infrastructure Improvement: On a related note, our nation has a lot of looming problems - decaying roads, bridges and water distribution systems, an archaic power grid, and the like. We are even lagging other nations in telecommunications and high speed Internet services. What policies will you enact to address those issues? How much money will you allocate to those issues and, if none, how would you justify a continued neglect of infrastructure for an additional four to eight years under your leadership?

12. Iran and North Korea: As you know, our nation and our allies have employed sanctions against "rogue regimes" for many decades. Until a few years ago, proponents of sanctions could point to Libya as "the exception that proves the rule," with Gadhafi's abandonment of certain weapons programs offered as proof that sanctions and international isolation can work. If the goal is merely to slow the development of weapons programs sanctions may have an impact, but there's no evidence that sanctions will stop the development of such programs.

    You have expressed that it is important to address North Korea's military posturing and nuclear arsenal, as well as the possibility that Iran might develop nuclear weapons, but to achieve those goals you focus on new, stronger sanctions. Exactly what new sanctions do you propose, and what evidence can you offer that they will work? What will be the measure of success or failure for your sanctions, and what additional steps will you take if your sanctions fail? Under what circumstances would you find that war with Iran or North Korea was in the best interest of the United States and, for each nation, describe what you believe the war would look like, the anticipated cost of the war, both economic and human, and your plan for the post-war period.

13. Campaign Finance Reform and Transparency: Do you believe that it is important to reduce the influence of wealthy corporations and individuals on elections, or at least to slow or stop the trend by which election costs are skyrocketing and politicians start fundraising for the next election the day after they win the current election? If so, what concrete measures do you support to address the issues of campaign funding and donor transparency? If not, why not?

14. The Middle East: What policies do you favor to produce politically stable, politically friendly governments in the Middle East, and how will those policies be implemented by your administration?

15. China: You have expressed that China doesn't play fair in the global marketplace. At the same time, China has emerged as a very important economic partner, providing labor for many U.S. and international corporations while also investing heavily in U.S. Treasury Bonds. What are the exact issues you hope to resolve between the U.S. and China, what steps will you take to address those issues, what will you do when China inevitably pushes back, and what do you believe will be the consequences of your policies and action on relations and trade between the U.S. and China?

16. Immigration: Unlike most Americans, your family has directly benefited from the immigration policies of one of our neighbors, Mexico, and your grandparents were able to take up residence in Mexico in response to what they perceived as religious persecution in the United States. As a business leader you are familiar with companies that bring workers into the U.S. on various types of employment visas. As a homeowner, you have used immigrant labor to maintain the grounds of your home. How have your experiences influenced your perspective on immigration? What is your preferred immigration policy for the United States, including for family reunification, asylum, for skilled workers, for unskilled workers, and for international students and scholars?

17. Pakistan and Afghanistan: What are your proposals for creating and sustaining stable regimes in Pakistan and Afghanistan that, even if not friendly to the U.S., are at least not unfriendly and are unwilling to host groups that are hostile to U.S. interests? What will you do to address the possibility that Pakistan might export nuclear technology, or that a collapse of its government might cause nuclear weapons to fall into unfriendly hands?

18. Poverty: Speaking in broad terms, we have two populations of people in poverty. The first group will emerge from poverty over time. The second group will not, and is at risk of becoming part of a generational cycle of poverty. What help can and should the government offer to each group? How can we help ensure that people in the first group do successfully emerge from poverty, rather than potentially falling into the second group? What policies do you propose that will help us break the cycle of poverty, first by helping impoverished adults find their way into jobs and careers, and second to minimize the risk that their children will become part of a cycle of poverty?

19. Intellectual Property: As you know, intellectual property law is very important to inventors and businesses. If you cannot protect your inventions and your creativity you operated under a severely reduced incentive, perhaps even a disincentive, to make serious investments of time and money in new technology and new ideas. At the same time we have created a byzantine system of patents that makes it virtually impossible to produce a new technology that doesn't violate somebody's patent, and literally impossible for a company to be certain that its new invention is not going to be subject to a claim that it violates a competitor's patent, or one held by a "patent troll". We have allowed copyrights to be extended well beyond the life of the creator, stifling derivative works even long after the creator's death.

    What policies do you propose to protect inventors on both sides of the equation - those whose inventions merit protection, and those who become the targets of demands or litigation despite their having no knowledge or awareness of the patent they have allegedly infringed and having made a good faith effort to respect the intellectual property rights of others? How will you balance those interests? What measures do you propose to protect companies from international or domestic piracy, and how will you balance the rights of intellectual property owners against the privacy rights of consumers, their right to use or control their own legitimately purchased or licensed products, and their legitimate fair use of copyrighted material? Would you support or oppose a new SOPA/PIPA-type law? If the former, under what terms? If the latter, on what basis, and would you veto any such law that came across your desk?

20. Federal Criminal Law: Do you agree that federal criminal laws extend too far into the realm of state and local concerns, and criminalize a lot of conduct that should at most be the subject of a civil legal action? If so, please share some examples of criminal laws that you believe represent federal government overreach, and what steps you will take to roll back or at least prevent additional overreach.

21. The Economy: We have been experiencing slow economic growth and slow job growth for far too long. As you know, the President's role in both boosting the economy and affecting job growth are overrated, but the President is in a position to advocate for economic policies and to influence the decisions made by the Federal Reserve. Assuming that the sluggish recovery continues, what policies do you propose to speed up the recovery and why do you believe they will be effective? If the recovery slows or stops, or we fall back into recession, what policies do you propose to respond to those problems and why do you believe they will be effective? If another catastrophe occurs, be it an economic bubble, a collapse of the Euro, or some other factor or catastrophe we may not have even considered, what measures will you take to insulate the U.S. economy from catastrophe and why do you believe those measures will be effective? What steps, if any, would you take to help stabilize the economic situation in Europe, or an economic problem that develops elsewhere in the world that might affect the U.S. economy? As you know, there was ample warning of both the Internet bubble and the housing bubble, yet concerns were dismissed. What steps will you take to identify growing problems, including economic bubbles, and how will you react if a potential problem is identified?

22. Subsidies: When, if ever, should the government subsidize private enterprise? If you support subsidies, when should subsidies be given? What form should they take - cash grants, conditional loans, loan guarantees, tax credits, tax exemptions, etc. - and under what circumstances? How should the amounts of any subsidies be determined? What form or forms of government subsidy should never be extended to private enterprise, and why?

Note, I'm not offering these as questions for a debate between the candidates - as questions that can be avoided or evaded. If I want to see somebody talk around the issues, I can turn on the television and listen to the pablum that the mainstream media deems to be sufficient - assuming I'm lucky enough that somebody in the mainstream media is even asking about the big issues - or look at the candidates' websites. I would like to hear substantive commentary on these issues.

Please note also, by implication these are issues that have not been adequately addressed by the Obama Administration. In some cases, through its action or inaction, we know where the Obama Administration stands, and where its rhetoric departs from its actions. I would welcome the Obama Administration to specifically address these issues, the extent to which its present policies have failed, and its plans to resolve any shortcomings or improve how it handles these issues in the future.

David Brooks' Math Problem

Like "everybody else", David Brooks wants to balance the budget.

The greatest pressure comes from entitlements. Spending on Medicare, Medicaid, Social Security and interest on the debt has now risen to 47 percent of the budget. In nine years, entitlements are estimated to consume 64 percent of the budget, according to the invaluable folks at the Committee for a Responsible Federal Budget. By 2030, they are projected consume 70 percent of the budget.

When you throw in other politically untouchable programs, like Veterans Affairs, you arrive at a situation in which a vast majority of the budget is off limits to politicians who are trying to control debt. All cuts must, therefore, be made in the tiny sliver of the budget where the most valuable programs reside and where the most important investments in our future are made.

Let's confront it at the outset: David Brooks is what some waggishly call a "very serious person" when it comes to balancing the budget, which means that he's not actually concerned with balancing the budget. Sure, he's worried about potential future growth in entitlements, and we do need to address that growth. But his seriousness begins and ends with "How do we cut entitlements". Not, "How do we reform entitlements to make them sustainable," or "How can we get the same benefits while spending less money." Nope, you do it his way or you get a dismissive sneer about how you're putting the "vast majority of the budget... off limits".

It's easy to find Republican commentators who complain, with reason, that Medicare and Medicaid are unsustainable and we must find a way to bring their cost growth under control. They're right. So let's look around the world, right now, at what other developed nations are doing. Are there any that spend as much as we do for health care? Are there others that get better outcomes? How about emulating them? Nope, not even a possibility. Not even if it will help control the cost curve and balance the budget.

It's a fair retort that other nations haven't achieved perfection. They may get similar or even better outcomes at much lower costs, but their medical cost growth curves (even if lower) are also unsustainable. But that's neither a valid basis to reject their approaches, nor to examine those elements that work and adapt them to the U.S. system. At least if the goal is to balance the budget. If you're willing to blow a huge hole in the deficit and allow out-of-control medical inflation due to your love of our pseudo-free market system, fair enough. But if so, why should anybody regard you as serious about balancing the budget. Your "my way or the highway" approach is every bit as obstructionist as that of your imaginary foe who won't agree to cut even a penny from Medicare.

As for Medicaid? Untouchable? Brooks can't be serious.

Social Security is not a pressing issue. It's budget is balanced well into the future. If you believe that the U.S. will be in such a bad position by then that it is going to start defaulting on its debts, well, what can I say? If that's our future, getting a Social Security check will be among the last things you'll be worried about. It's possible to balance Social Security for additional decades with relatively minor adjustments, but that will only have people like Brooks sounding the alarm about the next date after which Social Security is projected to be unable to pay full benefits.

I am perfectly content to talk about Social Security reforms and the impact of an aging population. People in Brooks' camp? They talk about privatizing Social Security, then they check the polls and find out that "privatizing" is not polling well so they start talking "personal accounts" (which must be selected from a narrow range of government-defined options, from which private managers will skim management fees, and for which there is no guaranteed return) while simultaneously complaining that it's unfair to speak of their plan as "privatization". Beyond that, what is Brooks offering? How... serious.

Brooks lectures the Republican Party that they have to do more than talk and dream about cutting entitlements - it's time to turn those dreams into reality:

Over the next few weeks, Republicans will try to cut discretionary spending to 2008 levels and tell their constituents they are boldly reducing the size of government. That is a mirage. Anybody who doesn’t take on entitlement spending is an enabler of big government.

Yes, the Republican budget plan is a joke. Has been a joke. Will be a joke. But wait a minute here. What word is completely absent from Brooks' editorial on how to be serious about the budget. He's mentioned interest, Social Security, Medicare, Medicaid, veteran's benefits.... That's right, in an editorial oddly titled "The Freedom Alliance",¹ he has forgotten about that pesky military budget.

If Brooks wants to make a policy argument about why the military budget should be untouchable, he's free to do so. The New York Times would pay him for that column, as it does with any other. But as with the argument he doesn't make as to how we could save billions, right now, by adopting a different approach to health care spending, he has no discernible interest in the subject. He'll complain that Teach for America's $18 million earmark is at risk, but forget about paying for it by pulling 40 or so combat soldiers out of Afghanistan.

Note another concept missing from Brooks' analysis: the tax increase. He's sort of a twisted Marie Antoinette. "Hey you - you want some cake? You can eat cake. You just have to take it away from veterans, sick people and old people." Buy more cake? You gotta be kidding, right? Once again he could offer a policy argument - why the rich, who are richer than ever, should not pay more taxes. But nope. Instead he's championing the recommendations of the failed Simpson-Bowles deficit commission and telling us that if we want barely trained college grads teaching our kids, grandma's gotta give up her medicine.
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1. This "Freedom Alliance" apparently involves various groups that want government money teaming up to convince the masses that our freedom is at stake if we don't convince Congress to cut entitlement spending in favor of perpetuating their earmarks. Go grass roots!

Military Spending Must Only Go Up

In an article at Commentary, Arthur Herman complains that Defense Secretary Gates is proposing cuts in military spending.

Altogether, the Gates Pentagon has slated $300 billion to be axed, including $100 billion in the next five years through reduced overhead and cuts in low-priority programs. And as all this happens, Medicare, Medicaid, and Social Security will grow to spend five federal dollars for every dollar spent on defense.

First the factual error: Gates has not proposed cutting the military budget. He has proposed reallocating the money from his proposed cuts "from administrative overhead to force structure", and has proposed that military spending continue to increase.

What we need is modest, sustainable growth over a prolonged period of time that allows us to make sensible investment decisions, and not have these giant increases and giant decreases that make efficiency and doing acquisition in a sensible way almost impossible.

And the logical error, of course, is that the cost of Medicare, Medicaid and Social Security are not affected by whether or not there are cuts in the military budget. Herman continues,

But the Obama-Gates drawdown signals a more ominous trend—a unilateral shift away from maintaining an American military that is truly second to none toward something far more modest in size and scope. A peacetime drawdown, such as took place after World War II and after the Cold War, is entirely appropriate and to be expected. But imposing one while a war—not one war but two, actually—is ongoing is an innovation, and not a welcome one.

Nothing in Gates' proposal suggests that he intends to reduce the size and scope of the military, unless you mean on the administrative side. Nothing in Gates' proposal even slightly resembles a peacetime drawdown, let alone something that would make the U.S. military to be "more like those of our European allies".

Herman also finds it problematic that the shift in the military from fighting two conventional, large-scale, land-based conflicts at the same time is being shifted in favor of fighting one such conflict along with a greater capacity to deploy and act quickly in potentially numerous locations where the U.S. is not fighting a conventional military:

The era of relying on the Abrams tank, the B-52, and carriers like the USS Eisenhower to defend American interests was coming to an end. In their place would be a smaller, swifter, and more flexible force, able to perform a range of operations, from protecting the homeland “in cooperation with domestic agencies” to executing counterinsurgencies and humanitarian missions.

There's nothing new there, of course - Donald Rumsfeld was advancing a similar concept for the military before 9/11. (Herman later touches on that fact, but is intentionally vague about the similarity of Rumsfeld's conception to what he now opposes.) Frankly, there's something to be said for not having to spend three to six months transporting your equipment by air and sea before you can launch a military action. Contrary to Herman's expectation, not every future conflict in which the U.S. will be involved is going to be a war of choice against a weak opponent. Frankly, if the U.S. remains prepared for a single large-scale conflict against one of the world's stronger militaries, it shouldn't have any problem simultaneously kicking down the doors in two nations such as Iraq and Afghanistan.

Herman criticizes Gates for his role in trimming the CIA in the post-Cold War era,

Those same tensions are now rising at the Pentagon. Gates is setting in motion a scramble to get rid of what we have now in order to create room for what’s to come. The result is supposed to be a leaner but more fully ready and versatile force. But what if we end up not with something better but—as with the CIA in the 90s—a calamity waiting to happen?

Sort of a cross between poisoning the well ("Gates has been wrong before, so why should we trust him now") with an appeal to tradition ("We've been doing things in a particular way in the past, so we should assume that approach is better than the alternatives").

Although Herman concedes that the U.S. has "an abnormally large nuclear-weapons arsenal relative to the rest of the world", he stomps his feet at the idea of cuts,

During the Cold War, America’s overwhelming nuclear strength not only made all-out war with the USSR unimaginable; it also prevented regional conflicts like Korea and Vietnam from escalating into hot clashes between the world’s biggest nuclear powers. No one can say how our decline as a nuclear behemoth will affect the dynamic of our long-term dealings with China and Russia, especially when they have learned that we are prepared to throw away our greatest advantage in the nuclear sweepstakes—our missile defense—at the stroke of a treaty pen, while rogue nations like North Korea and Iran are allowed to continue their nuclear- and ballistic-missile programs unchecked.

Except there's no basis in fact for this appeal to fear. The U.S. with its smaller, updated nuclear arsenal will remain capable of destroying the entire world several times over. Compared to the U.S., China's nuclear arsenal is and will remain tiny, but Herman would have us tremble in our boots at the thought of a military conflict with China - If that's all it takes to rattle the world's only superpower, why does Herman think the continued, massive U.S. nuclear deterrant won't intimidate other nations? ("They U.S can only wipe our entire country off the face of the earth 100 times? I scoff at their weakness.") Herman's overstatement seems to reduce to "No military program can ever be cut, because any cut could make us weaker". As for missile defense, there are legitimate questions as to what it could achieve even if the technology works. (But Herman has his baggy pants on and is performing that classic dance - "U can't touch this.")

Herman isn't content to argue that the old way of arming the nation must be maintained - he's simultaneously insisting that new defense technologies render it too vulnerable to even weak nations:

In the larger strategic picture, it’s also one where relatively cheap but deadly accurate anti-ship, cruise, and ballistic missiles will allow not only big powers like China and Russia but also third-rate ones like Iran and Syria (or even terrorist bands like Hezbollah) to threaten our aircraft carriers off the Taiwan coast or in the Persian Gulf, and where electronic anti-satellite warfare and cyberattacks can, at minimal expense, deny us command and control of those same forces.

Apparently he sees no contradiction between asserting that the massively expensive ships and war planes that he insists cannot be cut will be useless even against a piddling opponent like Hezbollah, and his notion that we must maintain and even expand expand our military's use of and dependence upon them.

Yet here Gates and the Pentagon find themselves in a painful dilemma. Their ultimate goal is to modernize our forces so that we can avoid spending more money: but every modernizing solution requires spending more, not less.

I guess it bears repeating: Gates has proposed spending more money, not less. That being said, there's no logical basis for the assertion that "every modernizing solution requires spending more" money.

As you have no doubt inferred, the editorial's foundation is an appeal to fear ("Rethinking our military and its spending will make us weak, vulnerable and subject to terrorist attacks.")

In the end, there remains only one alternative: to shrink the mission. If you want to see the results of a shrinking CIA budget and mission, visit lower Manhattan. What might follow from Gates’s career-capping years at the Obama Pentagon could make Ground Zero look like a war game.

When people are in a state of fear they don't think very well. So is the issue here that Herman is trying to create a state of fear, or is it that he's working from a state of fear? (What else do we have in that finale? A false dichotomy, a non sequitur....)

Border Defense and Military Spending

There's no dispute. Whether you're talking dollars or comparing U.S. expenditures to those of other nations, the U.S. spends a vast amount of money on its military. If you add in the cost of the nation's ongoing wars, the U.S. outspends every other nation in the world, combined. I'll credit Reihan Salam with being one of the few conservatives to directly address this issue, specifically for recognizing that the expenditure flows from our nation's expectations of the military and its role in the world, but that there is room for legitimate debate over that role.

Here are a couple of things that a President might not like to talk about, but has to think about. In many parts of the world, fresh water sources are being depleted. In many parts of the world, global warming threatens the food supply and will cause desertification. The drug war is destabilizing many nations, including Mexico. As things get worse in the rest of the world, it is likely that more people will attempt to illegally enter the United States. And while we can talk about measures that might be taken to reduce carbon emissions, how other countries might be assisted in developing their own economies and preparing strategies for potential food and water shortages, or how legalization of certain drugs would reduce the cash flow to drug cartels around the world, the fact is that Congress isn't prepared to take any serious action on any of those issues. Meanwhile, odds are that additional nations are going to join "the nuclear club," some of which are likely to be hit in the not-so-distant future by shortages of affordable food and fresh water.

Within that context, if you're the President, you might prefer to cut the military budget and redefine the role of the military, hoping that you can form military coalitions to address future problems. Or you might look at the future and perceive a need to maintain or even to expand the role of the military in order to be reasonably able to unilaterally defend U.S. interests as the global situation deteriorates. In that latter context, your Defense Secretary might sound a lot like Robert Gates, looking for ways to cut spending not in order to reduce military spending but to be able to maintain or expand the mission of the military without increasing the military budget. (By doing things such as reducing retirement benefits for military personnel.)

Yes, it's a fair retort, "But we could start taking steps, right now, to fix those problems or at least to mitigate their effects." But you know what? You can easily pass the military budget. You can easily pass supplemental war spending. You can easily pass a $600 billion border security bill, with the opposition party arguing "It's not enough". But when it comes to revisiting the nation's approach to drugs, carbon emissions, or whether there's an alternative to being a military hyperpower in a world that is likely to become less stable, you're likely to get Congressional consensus on only one thing: "We can't cut the military budget; if anything, we should spend more."

OMG - There's a Deficit!

Remember when Michael Gerson was head cheerleader for the Bush Administration, before entering his permanent audition to be chief water carrier for the Republican Party? Looking back on those days, Gerson himself admitted "I am not generally a deficit hawk." As I previously commented,

No, a guy who was cheerleader in chief for a President who turned record budget surpluses into record deficits, refused any sensible tax policy, refused any sensible spending policy, and decided to deficit spend our way through an extraordinarily expensive war of choice (also supported by Gerson) is not a deficit hawk. (Meanwhile, that same President failed to notice or take action to prevent an alarming crisis in the nation's financial industry that has precipitated the need for massive stimulus spending and trillion dollar bailouts.)

As the political winds have shifted, Gerson has pretty much transformed himself into a full-fledged, fear mongering deficit hawk. So why not, after all, open his latest attack on the Obama Administration with a false statement?

The Obama administration's budget proposals would dramatically increase publicly held debt as a percentage of the economy over the next decade, eventually slowing economic growth, fueling inflation and making America more dependent on the kindness of creditors.

I'll be the first to admit that I don't like the size of our projected deficits, but that doesn't mean we should ignore the facts.

As you would expect from a Republican water carrier, there's only one plausible solution to the problem - slash spending on programs that benefit the middle class. Remember a month or two ago (was it even that long) when the Republicans were spouting off about how allowing a tax cut to expire is the same thing as a tax increase? How it is unacceptable under the tax pledge signed by most Republican Members of Congress to eliminate a tax break, even in the name of balancing the budget, if it raises he payer's marginal tax rate? Well, that's only when we're talking tax policies that benefit the rich, or corporate welfare.

This round [of deficit reduction] may require not only the means testing of Social Security and Medicare but also the reduction or elimination of middle-class entitlements such as the mortgage interest deduction and the employer health-care exclusion.

See? It's "different" because it's a "midle class entitlement", so like magic it's no longer a "tax increase" to eliminate tax deductions or credits. But outside of that context, tax increases mean doom, even if history suggests otherwise. Unless, of course, it's a VAT, something Gerson now endorses as the next best solution to slashing government spending (without regard for how that might impact the economy). I'll refer back to my skepticism that Republicans oppose a VAT. Like every other idea Gerson offers, it's gloriously regressive.

It is of course fascinating that the Republican Party marches in lockstep against malpractice reform, and against any notion of single payer or even a public option, while ignoring the fact that every western nation, even those with significantly better outcomes and typical levels of service, spends far less on health care per capita than the United States. It's almost enough to make you think they're not serious about reducing the deficit - that they have another agenda. (I'm not saying the agenda's not shared by the Democratic Party, which was instrumental, after all, in killing off even a public option, but can't we be honest about the fact that a majority of Members of Congress prioritize the elevation and protection of corporate profits above all other concerns?)

Strangely, despite his new found zeal to balance the budget at all costs, Gerson has forgotten to endorse cuts in spending in areas other than those that benefit the middle class and poor. Such as cuts in military spending, cuts in corporate welfare and agricultural subsidies.... Is it that he lacks the brains to recognize the potential for savings, or lacks the stomach to stand up to his party?

Samuelson Wants to Slash Support for the Elderly, Round...

I've lost count. In any event, it's yet another argument by Robert Samuelson to slash Medicare, Medicaid and Social Security. His initial premise isn't what's bad:

In all the recent reports, speeches and news conferences concerning the federal budget outlook -- including the administration's proposed budget for 2011 -- hardly anyone has posed these crucial questions: What should the federal government do and why; and who should pay?

Samuelson argues that current expenditures and their projected growth will make it impossible "to close the massive deficits without big cuts in existing government programs or stupendous tax increases." That, of course, ignores the fact that healthcare reform could reduce the overall cost of healthcare for the nation, and could potentially both increase quality and decrease healthcare inflation. When it comes to reform, other than "slash, burn and privatize", Samuelson appears to be in the "just say no" club. And having fixed himself in that corner, he is comfortable saying "No borrowing or tax increases to pay for this" because he knows that absent reform the financial situation will continue to deteriorate - perpetuating the vicious circle that he uses to support his argument for slash and burn. The only other government program he identifies for possible cuts? Farm subsidies.

Samuelson proposes raising the eligibility age for Social Security and reducing the benefits available to wealthier retirees. You could argue that he's missing the point - wealthier retirees for the most part paid a lot more into the system during their lifetimes and thus, as the system is designed, are supposed to receive higher payouts during their retirement. But he knows that. He's pushing a "reform" that can reasonably be expected to diminish support for Social Security among higher wage earners, with the goal of shifting the program from an insurance system that benefits everybody to a welfare system that could be viewed as expendable. Seriously, an argument can be made for replacing Social Security with a welfare program for the elderly, but any such program should be funded out of the general fund. (And we shouldn't forget that the reason people like Samuelson prefer that to the status quo is that welfare programs are easier to cut or eliminate.)

Further, the consequence of raising the age of eligibility would inevitably be an increase in expenditures out of the general fund, as retirees in their late sixties seek disability benefits instead of retirement benefits. Samuelson proposes,

Eligibility ages for Social Security and Medicare should be gradually raised to 70, coupled with a requirement for people to buy into Medicare at 65.

But what if a sixty-five year old can't afford the premium? Also, given that the fundamental problem with Medicare is the high cost of end-of-life care, how would that translate into a level of cost savings that would prevent the fiscal nightmare Samuelson projects? Further, why not take things in a different directly - let anybody over the age of 55 buy into Medicare at a rate such as "the average cost per recipient plus ten percent"? The extra revenues generated would subsidize care for those over 65, and you wouldn't need to impose a means test for a full or partial waiver of premiums for those between ages 65 and 70 - something likely to erase much of the revenue that Samuelson imagines would be generated by the mandated buy-in.

But let's get back to Samuelson's initial argument - that we need to ask "What should the federal government do and why". What gargantuan federal expenditure isn't mentioned in Samuelson's piece? (I doubt I have to tell you that it's military spending.) Part of a debate over the proper role of the federal government is whether or not we should scale back our military expenditures. Do we need to be exponentially more powerful than the next largest military power, or is a smaller increment more reasonable? If you need to be reminded, here's what Samuelson has previously argued about military expenditures:

A possible war with Iraq raises many unknowns, but “can we afford it?” is not one of them. People inevitably ask that question, forgetting that the United States has become so wealthy it can wage war almost with pocket change. A war with Iraq would probably cost less than 1 percent of national income (gross domestic product). Americans have grown accustomed to fighting with little economic upset and sacrifice.

When it comes to war, the Iraq war (more than $1 trillion spent to date, many projections of long-term cost in the $2-3 trillion range) is "pocket change"? As compared to Samuelson's dire scenario from ten years in the future?

In 2020, the gap is $1 trillion, again approaching a fifth [of spending]: Spending is $5.7 trillion, taxes $4.7 trillion.

Suddenly that $1 trillion has become "real money".... No, it's a matter of priorities:

But I am certain — now as then — that budget consequences should occupy a minor spot in our debates. It’s not that the costs are unimportant; it’s simply that they’re overshadowed by other considerations that are so much more important.

If Samuelson supports the expenditure, budget issues are at most a minor distraction. So it's far from a surprise that when Samuelson calls for a debate on what "the federal government do and why; and who should pay" he means only to gore somebody else's ox.

If We Assume a Slippery Slope....

It's not that Fred Hiatt's editorials are usually good, but he usually hides behind the anonymity of his editorial board when he makes his most inane arguments. So I was a bit surprised when he regurgitated some of his recent anonymous inanity in an editorial to which his name is attached.

From the start, the Obama administration has said that health-care reform has to make health care both more accessible and less costly . If Congress does the first without the second - guarantees a new entitlement without controlling costs - it will bankrupt us, because health-care costs are rising faster than the overall economy is growing.

Hiatt distinguishes the cost of wars from the cost of healthcare, arguing that we can spend ourselves into deficit oblivion over wars "because wars end", but what of the military budget? Even excluding the cost of the wars in Iraq and Afghanistan, Hiatt should be wringing his hands over the inevitability that the military budget will bankrupt us. After all, the same slippery slope argument applies to any category of spending where costs are increasing faster than inflation. I would infer first that Hiatt doesn't recognize that slippery slope reasoning is not logically sound,¹ and second that his concern about deficit spending is based primarily (perhaps exclusively) on whether he supports or opposes the government action at issue.

Hiatt suggests that only two things are needed to eliminate healthcare inflation.

• First, we need to tax the middle class and try to economically pressure employers to diminish the quality of healthcare plans available to their employees. This is the Gingrich model - the idea that if you force employees to pay for their healthcare out of pocket, they will be more selective about what care they obtain and costs will decline. Never mind that there's no evidence that this will work and, with the experience so far with low-coverage, high-deductible plans that costs for healthcare consumers will in fact go up.

• Second, we need to have Congress "cede its power to regulate the minutiae of Medicare coverage" - because, um, it would be better if that were done by magic or something. (Hiatt doesn't explain.) Seriously, healthcare inflation for Medicare is lower than inflation for all other healthcare, yet Hiatt thinks we can solve the world's problems by making some sort of undefined change to "the minutiae of Medicare coverage". Where's his call for private insurers to "cede [their] power to regulate the minutiae of [health insurance] coverage"?

Hiatt continues his silliness by arguing that a public plan won't actually save money over private plans:

If, as advocates sometimes argue, a public plan operates without favoritism, it will be simply one more entrant in the marketplace. Like other companies, it will have marketing and administrative costs. In some markets served by few private plans, it could offer a useful alternative. But it won't radically reduce costs.

People who are truly sick like their Medicare coverage. I know of few people who don't have gold-plated insurance who, following a serious illness, think highly of their private insurance plans. People see value in both having available, and having as a competitor to private insurance, a plan that won't spend huge amounts of money trying to deny coverage it owes under contract. The extraordinary misconduct and, at times, overt fraud committed by insurance carriers should give anybody pause about whether reform could be achieved without a public alternative. Hiatt may be correct that a public plan that competes with private plans doesn't produce much in the way of cost savings, but it could produce a lot in terms of peace of mind. (And if Hiatt were truly in favor of cost savings, he would be looking at various other nations' successful efforts in that regard, rather than throwing up a smokescreen in the defense of our nation's abject failure to control healthcare spending.)

I doubt that a public plan will face much in the way of marketing costs. Everybody will know what it is, where to find it, and what it offers. Besides, how much marketing does Hiatt believe private insurance companies direct at the uninsured and underinsured markets? At least if we're talking about legitimate companies.

If, as advocates argue at other times, the point is to insure sick people whom private companies, despite all regulatory efforts, find ways to shun, the public plan could offer a valuable safety net. But that wouldn't save money.

I've previously pointed out that it is ill-advised to pursue the approach that to be acceptable, any healthcare reform bill must fix every defect of the current system. Here, Hiatt extends that argument to an absurd level, suggesting that it's not enough that the bill fix all problems in the aggregate, but that each and every element of the bill advance all three goals (universality, cost control, and patient choice). At the same time, he does not propose how things would be better in the absence of a public plan - and proposes nothing to pressure private insurance companies or healthcare providers to reign in costs.² If Hiatt believes what he's suggesting, he's an idiot. If he doesn't, yet still expects you to buy his argument, he thinks you're an idiot.
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1. It could be that Hiatt knows his logic is childish and flawed, but that he doesn't care. He later presents another slippery slope argument, whereby a public plan gradually bankrupts every private insurance plan and becomes the only option based upon an entirely speculative set of future events and assumptions. Perhaps he imagines himself as a silver-tongued advocate, whose sophistry and illogic will not be detected by his readers....

2. Granted, this could be because he doesn't care about the inflation caused by the private side of the market, and favors a system in which private insurers maximize their profits even at the expense of the three ostensible goals of healthcare reform.

A $Billion in Aid for Reconstruction?

Note to Kwame Kilpatrick¹: Attack Canada.
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1. For the moment, at least, he remains mayor of Detroit.

Modern Militaries and Free Riders

While, thanks to occasional editorial coverage, a small but presumably growing number of people are aware of developments in Darfur, the world still seems disinclined to act to stop the carnage. (Let's see... an tyrannical regime with a history of supporting terrorism, now engaged in the slaughter of its own people, and creating a refugee crisis which could destabilize the region? What were Bush's criteria for intervention, again?) The "big news" perhaps is that Sudan has permitted a 300-member "African Union protection force" into the region to, um... observe? As Paul Craddick recently noted,

The Economist finally alights on the idea of a force of African troops, "under the auspices of the AU [African Union]," acting in effect as proxies for "Western powers" (which ones?). The last sentence persists in its cosmopolitan assumptions by noting again that "the world has already dithered too long to save tens and possibly hundreds of thousands of lives." Indeed ... if anything is going to be done about Darfur, the U.S. and U.K. will lead the charge. I don't say this out of any kind of "patriotism" - it just seems obvious.

That comment brought to mind the cynical view of a friend of mine, about a proposed E.U. "rapid response force" which would ostensibly be able to respond to crises such as Darfur apart from NATO or the United States. He noted that it was highly unlikely that such a force could be "rapidly" deployed without the United States, as European nations lack the necessary fleet of high-capacity cargo planes and (in his opinion) were extremely unlikely to acquire such a fleet.

The U.S. has been critical of its allies for their comparatively low investment in their militaries. Yet even the United Kingdom seems inclined to reduce its military rather than maintaining its present capacity, and the rest of Europe (and Canada) seems disinclined to increase military spending. This seems to emerge both from domestic spending priorities, but also from a changing perception of the world and of the role of a military. Most developed nations seem content to have a basic defensive capacity, perhaps with the ability to lend soldiers to an international effort or peacekeeping force, but without the capacity to engage in any significant unilateral actions. They have also seemingly concluded, based on its actions, its conduct and voting record in the U.N. Security Council, and probably also its hostility to the notion of a European rapid response force, that while the U.S. claims it does not want to be an "international policeman" it does not want other nations to individually or collectively take that role. At least, not with regard to any situations it deems to be of geopolitical import.

Whatever the cause, most nations of the developed world have apparently decided that, to the extent that U.S.-style military might is required, they can ride on the coattails of the U.S. military. And they seem to have also determined that if a situation is not of sufficient geopolitical import for the U.S. itself to intervene, it probably is't a situation where they wish to commit their own troops.