debt burden

During Part One of this series, I approached the end of my post with this paragraph.

Apart from the political opposition from the insurance companies that Medicare for All would have engendered, I think the main justification for abandoning Medicare for All and switching to the PO and eventually the PO-less ACA, was actually neoliberalism. The President, his main advisers, the Democratic leaders in Congress, and most progressives working for Washington progressive organizations were steeped in neoliberal doctrine. They viewed the Bush tax cuts and the two Wars as unpaid for. The ARRA stimulus Act was similarly unpaid for and added to deficit spending and to the debt-subject-to-the-limit. They believed and most believe today that the Federal Government can have solvency problems if the debt-to-GDP ratio increases too much, and interest rates on the national debt are driven up by the bond vigilantes.

A Medicare for All Act would have required Federal spending on health care to rise by $800 - $900 Billion per year over present levels. They were not ready to cover that with higher tax revenues, and they were not ready to deficit spend it because they viewed that as fiscally irresponsible, and believed then and still believe now that it's necessary to decrease the debt-to-GDP ratio over time.

So, they wouldn't consider spending for Medicare for All. They wouldn't look seriously at the hundreds of thousands of lives they were consigning to oblivion, at the bankruptcies and divorces they could prevent, or at the obvious fact that while HR 676 would have cost the Government $900 Billion more in money annually that the Government can create at will and at zero real cost; it would have saved the people who have to pay for health insurance, and health care out of pocket and in the form of “co-pays” $1.8 Trillion annually, thus providing a marvelous boost to the economy. Instead, they just said to everybody, that it was impractical and that the United States couldn't afford it; but that it would be able to to afford a self-supporting PO bill, and later when that was taken off the table, a deficit neutral insurance bailout like the ACA.

My friend Lambert Strether liked Part One and cross-posted it at Yves Smith's Naked Capitalism site. But the above statement bothers him because he thinks that using the label neoliberalism alone without explaining what aspects of that paradigm provided the justification for taking Medicare for All off the Table, and who the political actors are who adhere to this, makes my treatment incomplete. Even though I agree with the view that it's easy enough to google “neoliberalism” if someone doubts what I mean by the “term,” I also agree with Lambert that it would add something to Part One for me to be more specific about my thinking and show the connections between neoliberalism and the decision to take Medicare for All off the Table. Hence, this Part Two. Read below the fold...

During the run-up to passage of the Affordable Care Act (ACA), I wrote a number of posts (here, here, and here) assessing the ACA very negatively, and pointing out the shortcomings of the various versions of this bill, preceding its final passage. My focus was on contrasting varying versions with HR 676, the Conyers-Kucinich Medicare for All bill, in relation to its likely impact on fatalities, bankruptcies and divorces attributed to lack of health insurance coverage in the US. Read below the fold...

In an October 12th Post entitled “Foreigners and the Burden of Debt,” Paul Krugman made the following comment.

”. . . we’d all agree that deficits make us poorer if they crowd out investment spending — which they would if the economy were near full employment, but won’t if we’re deeply depressed. All we have to do is realize that net foreign investment — purchases minus sales of assets from and to foreigners — is also a form of investment. Or to put it a bit more simply, sure, budget deficits can make us poorer as a nation if they lead to bigger trade deficits.”

Read below the fold...

(Author's Note: This post updates Part Three of a series reviewing Warren Mosler's book: The 7 Deadly Innocent Frauds of Economic Policy. The updating is prompted by a post by Hannah at DailyKos offering a “. . . a Review Sort of” of Warren's book. Read below the fold...

In "All Together Now: There Is No Deficit/Debt Problem,” I warned against the message calling for deficit reduction that the President would probably deliver in his State of the Union Address. And in a series of later posts, I looked at 7 fairy tales I thought he would tell. Finally, in a summary post, I offered a table summarizing the fairy tales and corresponding truths. In this post, I'll do a post-mortem. How many of the 7 fairy tales did he tell us? Read below the fold...

In "All Together Now: There Is No Deficit/Debt Problem,” I warned against the message calling for deficit reduction that the President will probably deliver in his State of the Union Address next month. I view the coming narrative as very likely to be composed of a number of fairy tales. In previous posts in this series I've analyzed and critiqued seven of the fairy tales I expect the President to tell us in his coming State of the Union speech. Read below the fold...

In "All Together Now: There Is No Deficit/Debt Problem,” I warned against the message calling for deficit reduction that the President will probably deliver in his State of the Union Address next month. I view the coming narrative as very likely to be composed of a number of fairy tales. In previous posts in this series I've analyzed and critiqued six of the fairy tales I expect the President to tell us in his coming State of the Union speech. In this post, I'll discuss a seventh fairy tale: the idea that our grandchildren must have the heavy burden of repaying our national debt.

Let's begin with a little history, only once, in the history of the Republic has the United States fully repaid that national debt, and that was in 1835, when Andrew Jackson's second Administration paid off the debt. That pay-off and the further attempt to establish a fund that would compensate for future deficits was followed by the one of the worst depressions in American history in 1837. That depression brought back the deficit and the national debt, and though the Government has sometimes run surpluses since then, it has never again paid off the national debt. Read below the fold...

In the previous two posts in this series I've examined four ideas that Warren Mosler has called “deadly innocent frauds,” (difs) and that others have variously referred to as myths, scares, and lies. Read below the fold...