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Wednesday, March 28, 2012
John Carney — Obamacare, the Individual Mandate and MMT
"And a government authorized to spend in pursuit of the general welfare may not be authorized to command solvency-constrained households to undertake that spending instead."
Hits it out of the park? Only if you get MMT, which few voters do. Fact is when this gets struck down there will likely be no health care for millions. I never liked Obamacare, but something needs to be done. We can't stand around waiting for some magic implant of MMT in the publics mind.
Jonf, this is a huge step forward. The government as big household analogy is in my view the principal block to popular acceptance of MMT. Otherwise, it seems to most people to be counterintuitive.
Yes, this is a big deal. It moves the ball significantly forward toward a popular understanding of how the existing monetary system works and why the framing of the current debate is so wrong.
John is far from being an MMT proponent, but he recognizes that MMT gets a whole lot right that others are getting backwards, and he is trying to do something about that so we can have an intelligent debates instead of talking nonsense.
Here is hoping you are right about that. But all you hear these days is we are about to go bust. I just heard a,guy on tv say we cannot afford health care. No maybes about it. But one day we will all get with the program, I hope.
The plus side to this is maybe there will be a move to single payer health care.
Jonf, That was probably David Walker on Dylan Ratigan's program, being hosted today by the very faux "progressive" Matt Miller. Walker is Pete Peterson's sidekick and former Comptroller General of the United States. The basics of MMT have been explained to him by Warren Mosler. He nods in agreement and then says something entirely different, probably because if he publicly stated his agreement he wouldn't be getting paid off by Peterson anymore.
I agree that invalidating the law may invigorate the Medicare for all push. The ACA really took the pressure off. Not because it's been successful, but because it's placed the politics of health care in limbo until people can see whether the ACA will work. The SC could return us to the health care fight by making it clear that the law won't work.
There's a post on FDL by Jon Walker in which he says the individual mandate has little impact on the cost. And for those at 400% of the poverty level it has no impact at all since the gov will pay any increase. For all others the Rand people said it would be relatively small. It will cost the gov more and you know they will get the vapors over that.
If the court strikes it all down, we should go for Medicare fr all.
I doubt too many in gov understand MMT or they are really playing dumb.
Well written article, and accolades if he goes on tour with that message.
I hope the Supreme Court terminates the Mandate, because if they don't every industry will want a mandate so people are forced to buy there products. The financial industry will likely be next with all the wonderful products they can offer, and automakers will definitely want to force everyone into buying a new car every year.
He gives an interesting policy analysis, but the time to make that argument was when Congress was considering the bill. Overturning the law would set the democratic process in this country back 70 years. There almost wasn't a New Deal remember.
I as against the individual mandate from day one, as was President Obama. I don't know who convinced him otherwise. It was obviously a politically unpopular move that would come back to bite them.
Howard Dean said from the get-go it was a loser and it wasn't necessary anyway. As former governor of Vermont he was well-versed in the issues surrounding health care. How right he was.
Of course, MMT shows that the whole idea of funding the program through user contribution is pointless anyway, and counterproductive to boot.
"That is a good one. Also good that John cites MMT and not MMR."
No surprise there. John Carney now realizes that MMR and JKH lack rigor, unlike MMT which has been around for years and is backed up by real scholarship.
One thing MMR has for sure is the most comprehensive and reader friendly primer on understanding modern money. (http://monetaryrealism.com/understanding-mmr/ ) I'm surprised MMT doesn't have something very similar. Scott Fullwilers is too dense and not as reader friendly (http://www.nakedcapitalism.com/2010/08/guest-post-modern-monetary-theory-%E2%80%94-a-primer-on-the-operational-realities-of-the-monetary-system.html). Also, Randy Wray's the ongoing series at New Economic Perspectives (http://neweconomicperspectives.org/p/modern-monetary-theory-primer.html) is too long (intimidating) for an absolute newcomer.
I'm relatively new to MMT and MMR and therefore I'm not passing judgment yet on the ongoing disagreements. Too much of it is still over my head. But I'm trying.
Until someone in MMT writes up a better and more reader friendly primer, I will continue to send newcomers to Cullen's.
For people already familair with economics I usually just send them straight to 4. I'm not choosing MMR over MMT. Not at all. It's just that Cullen's primer is very comprehensive.
If John is on a mission to change minds about the "govt as household" falsehood, he can start right there across the desk at CNBC.
Here is an old post which features an appearance by Warren in the first video. Fast forward to just before the 3:00 mark and listen to Warren blow up the "govt as household" analogy very clearly and succinctly.
Then, right after Warren concludes his explanation, hear Ms Becky Quick say something like "I wish I could just do that in my checking account".
Right after Warren has just explained why she can't do that in her checking account.
Now, I'm trying to be as respectful as possible here, but Ms Quick does not seem to be the sharpest tool in the shed when one views this video. Perhaps a director was talking in her ear when Warren was talking and she couldn't hear him.
In any case, Ms Quick needs to have a sit-down with John (John, perhaps buy her a cup of coffee) and have this explained to her again and see if she gets it.
"No surprise there. John Carney now realizes that MMR and JKH lack rigor, unlike MMT which has been around for years and is backed up by real scholarship." You see so deeply into John's soul its scary. :o)
Reading through the transcript from Tuesday's oral arguments, it was interesting to see Scalia, Ginsburg, Sotomayor and Kennedy all make the point that the government could have achieved reformed healthcare, with no constitutional issues in doubt, with a govt-run program.
The nub of the argument is when Kennedy mused whether the availability of a "single payer" solution made the Administration's mandate argument weaker (you guys neglected the valid tool at your disposal), or stronger (since you can lawfully do it one way, we'll give you latitude to try it another).
Matt, I totally agree. The benefits of a single payer system would be astonishing. Set aside the 50 million or so uninsured having medical coverage that won't bankrupt them (which can happen WITH health insurance if the copayments are stiff enough). Stripping healthcare costs from family, business, state/local govt budgets would dramatically improve their respective balance sheets.
To give one example, state govts spend 20% of their budgets on Medicaid, if Uncle Sam took that over as part of a universal Medicare program, that's an awful lot of revenue that states won't have raise from sales and property taxes.
That is a good one. Also good that John cites MMT and not MMR.
ReplyDelete"And a government authorized to spend in pursuit of the general welfare may not be authorized to command solvency-constrained households to undertake that spending instead."
ReplyDeleteOutstanding.
Trix,
ReplyDeleteInteresting legal insight by John there... being a moron policymaker may actually be unconstitutional... not bad!
Resp,
@Letsgetitdone
ReplyDelete"Also good that John cites MMT and not MMR."
What is MMR?
Yep, yep. It's tricky, but quite clever. I am going to internet stalk him how...
ReplyDelete:)
Hits it out of the park? Only if you get MMT, which few voters do. Fact is when this gets struck down there will likely be no health care for millions. I never liked Obamacare, but something needs to be done. We can't stand around waiting for some magic implant of MMT in the publics mind.
ReplyDeleteJonf, this is a huge step forward. The government as big household analogy is in my view the principal block to popular acceptance of MMT. Otherwise, it seems to most people to be counterintuitive.
ReplyDeleteYes, this is a big deal. It moves the ball significantly forward toward a popular understanding of how the existing monetary system works and why the framing of the current debate is so wrong.
John is far from being an MMT proponent, but he recognizes that MMT gets a whole lot right that others are getting backwards, and he is trying to do something about that so we can have an intelligent debates instead of talking nonsense.
Ryan,
ReplyDeleteMMR is a recent offshoot of MMT.
They look at some things a bit differently than MMT and they have started a website here:
http://monetaryrealism.com/
FYI if you are not being facetious...
Resp,
Here is hoping you are right about that. But all you hear these days is we are about to go bust. I just heard a,guy on tv say we cannot afford health care. No maybes about it. But one day we will all get with the program, I hope.
ReplyDeleteThe plus side to this is maybe there will be a move to single payer health care.
Jonf, That was probably David Walker on Dylan Ratigan's program, being hosted today by the very faux "progressive" Matt Miller. Walker is Pete Peterson's sidekick and former Comptroller General of the United States. The basics of MMT have been explained to him by Warren Mosler. He nods in agreement and then says something entirely different, probably because if he publicly stated his agreement he wouldn't be getting paid off by Peterson anymore.
ReplyDeleteI agree that invalidating the law may invigorate the Medicare for all push. The ACA really took the pressure off. Not because it's been successful, but because it's placed the politics of health care in limbo until people can see whether the ACA will work. The SC could return us to the health care fight by making it clear that the law won't work.
There's a post on FDL by Jon Walker in which he says the individual mandate has little impact on the cost. And for those at 400% of the poverty level it has no impact at all since the gov will pay any increase. For all others the Rand people said it would be relatively small. It will cost the gov more and you know they will get the vapors over that.
ReplyDeleteIf the court strikes it all down, we should go for Medicare fr all.
I doubt too many in gov understand MMT or they are really playing dumb.
Well written article, and accolades if he goes on tour with that message.
ReplyDeleteI hope the Supreme Court terminates the Mandate, because if they don't every industry will want a mandate so people are forced to buy there products. The financial industry will likely be next with all the wonderful products they can offer, and automakers will definitely want to force everyone into buying a new car every year.
He gives an interesting policy analysis, but the time to make that argument was when Congress was considering the bill. Overturning the law would set the democratic process in this country back 70 years. There almost wasn't a New Deal remember.
ReplyDeleteI as against the individual mandate from day one, as was President Obama. I don't know who convinced him otherwise. It was obviously a politically unpopular move that would come back to bite them.
ReplyDeleteHoward Dean said from the get-go it was a loser and it wasn't necessary anyway. As former governor of Vermont he was well-versed in the issues surrounding health care. How right he was.
Of course, MMT shows that the whole idea of funding the program through user contribution is pointless anyway, and counterproductive to boot.
"That is a good one. Also good that John cites MMT and not MMR."
ReplyDeleteNo surprise there. John Carney now realizes that MMR and JKH lack rigor, unlike MMT which has been around for years and is backed up by real scholarship.
One thing MMR has for sure is the most comprehensive and reader friendly primer on understanding modern money. (http://monetaryrealism.com/understanding-mmr/ ) I'm surprised MMT doesn't have something very similar. Scott Fullwilers is too dense and not as reader friendly (http://www.nakedcapitalism.com/2010/08/guest-post-modern-monetary-theory-%E2%80%94-a-primer-on-the-operational-realities-of-the-monetary-system.html). Also, Randy Wray's the ongoing series at New Economic Perspectives (http://neweconomicperspectives.org/p/modern-monetary-theory-primer.html) is too long (intimidating) for an absolute newcomer.
ReplyDeleteI'm relatively new to MMT and MMR and therefore I'm not passing judgment yet on the ongoing disagreements. Too much of it is still over my head. But I'm trying.
Until someone in MMT writes up a better and more reader friendly primer, I will continue to send newcomers to Cullen's.
JK, try Warren Mosler's The 7 Deadly Innocent Frauds of Economic Policy. It is not terribly long and easy reading.
ReplyDeleteJonf,
ReplyDeleteThanks. I've read it. It was one of the first MMT materials I read. I agree.. Mosler's book is very accesable for newcomers.
For absolute newcomers (people with zero economics background), I've given them these to read, in this order:
ReplyDelete1. http://bilbo.economicoutlook.net/blog/?p=1075
2.http://www.gurufocus.com/news/147269/the-problem-with-the-deficit-its-not-big-enough
3. http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf
4. http://monetaryrealism.com/understanding-mmr/
For people already familair with economics I usually just send them straight to 4. I'm not choosing MMR over MMT. Not at all. It's just that Cullen's primer is very comprehensive.
If John is on a mission to change minds about the "govt as household" falsehood, he can start right there across the desk at CNBC.
ReplyDeleteHere is an old post which features an appearance by Warren in the first video. Fast forward to just before the 3:00 mark and listen to Warren blow up the "govt as household" analogy very clearly and succinctly.
http://mikenormaneconomics.blogspot.com/2010/02/lets-get-this-national-debate-started.html
Then, right after Warren concludes his explanation, hear Ms Becky Quick say something like "I wish I could just do that in my checking account".
Right after Warren has just explained why she can't do that in her checking account.
Now, I'm trying to be as respectful as possible here, but Ms Quick does not seem to be the sharpest tool in the shed when one views this video. Perhaps a director was talking in her ear when Warren was talking and she couldn't hear him.
In any case, Ms Quick needs to have a sit-down with John (John, perhaps buy her a cup of coffee) and have this explained to her again and see if she gets it.
Resp,
@ Matt Franko
ReplyDeleteMatt,
I tried to be serious and funny at the same time. Only forgot this ";-)" at the end.
JK - maybe this?
ReplyDeletehttp://mmtwiki.org/wiki/Introduction
"No surprise there. John Carney now realizes that MMR and JKH lack rigor, unlike MMT which has been around for years and is backed up by real scholarship."
ReplyDeleteYou see so deeply into John's soul its scary. :o)
Reading through the transcript from Tuesday's oral arguments, it was interesting to see Scalia, Ginsburg, Sotomayor and Kennedy all make the point that the government could have achieved reformed healthcare, with no constitutional issues in doubt, with a govt-run program.
The nub of the argument is when Kennedy mused whether the availability of a "single payer" solution made the Administration's mandate argument weaker (you guys neglected the valid tool at your disposal), or stronger (since you can lawfully do it one way, we'll give you latitude to try it another).
b,
ReplyDelete" all make the point that the government could have achieved reformed healthcare, with no constitutional issues in doubt, with a govt-run program. "
To me this failure goes right back to the false "taxpayer on the hook" belief by the Dems...
Resp,
Matt, I totally agree. The benefits of a single payer system would be astonishing. Set aside the 50 million or so uninsured having medical coverage that won't bankrupt them (which can happen WITH health insurance if the copayments are stiff enough). Stripping healthcare costs from family, business, state/local govt budgets would dramatically improve their respective balance sheets.
ReplyDeleteTo give one example, state govts spend 20% of their budgets on Medicaid, if Uncle Sam took that over as part of a universal Medicare program, that's an awful lot of revenue that states won't have raise from sales and property taxes.
I heard recently that most medical bankruptcies are incurred by people with insurance rather than the uninsured.
ReplyDeleteMedical debt is a big issue. See Medical Debt