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September 06, 2007

Equivalence

I think Matt makes the wrong comparison here:

If Hillary Clinton got up at the next presidential debate and said "I believe a policy of 'Medicare for all' could save enough money to pay for a universal preschool program and more generous Social Security benefits," Barack Obama would say she was out of her mind, major liberal commentators would agree, and if she started angrily defending the claim against all comers it would be big trouble for her campaign. By contrast, were Mitt Romney to attack John McCain's embrace of supply-side dogma, that would swiftly destroy Romney's campaign as all the major institutions of the right moved to expel him from the movement.

If Clinton said that, heads would nod. A very strong argument could be made that administrative and bargaining savings -- i.e, the government saying they're going to pay 20 percent less for Lipitor, and Pfizer will just have to deal -- from a Medicare-for-All system would save enormous amounts of money. Obama wouldn't dare attack it, he'd just argue that he doesn't think it politically possible, and the sort of policies required for those savings have tradeoffs Americans may not want to make. (Incidentally, I don't think Medicare-for-All would create those savings, but not because it couldn't, only because we wouldn't want to implement the necessary regulations.)

Supply-siderism, by contrast, is a proven failure. Unlike how we can look to Canada's single-payer system and notice that they pay 50 cents on ever dollar we spend, you can look at the 90s, when the supply-siders promised gloom-and-doom if Clinton increased taxes, and say that their theories are definitively discredited. I'm trying to think of a policy as thoroughly whack, but as thoroughly adopted, on the left, but I'm not coming up with much. The correct political comparison to a Republican decrying supply siderism is if a Democrat said we needed to cut Social Security benefits -- he'd be destroyed by the party. Problem is, that's a bad idea Democrats would be rightly flayed for adopting, while sane economic concepts are good ideas Republicans would be wrong marginalized for admitting.

September 6, 2007 | Permalink

Comments

what's with people thinking Medicare-(in its current form)for-all would save any money? Is there anything Medicare doesn't pay for?

Posted by: spike | Sep 6, 2007 1:58:00 PM

you missed the point. They mean that the cost to the federal government would definitely go up because of medicare for all. Overall spending on healthcare might go down as you argue (I think correctly).

But she would be mad to argue that the three or four fold increase in an entitlement program would DECREASE government spending, just as it is mad to suggest that a tax cut would INCREASE govt rev.

Posted by: yep | Sep 6, 2007 1:58:46 PM

"Supply-siderism, by contrast, is a proven failure."

Is it me, or is this blooger spat getting thoroughly annoying? This is killing me like my wife watching The Hills: I’m annoyed yet I come back into the room to see if the hot little blond with the new chest breaks up with her clown, 21-year old fiancé (like that’s going to work!).

There seems to be a couple of distinction that needs to be made: supply-side economics as it manifest itself in politicians and how it manifests in economists, since these lines seem to be blurred at this point.

Politicians are selling and they’re selling all the time. I thought McMegan’s example with Ruben was apt here – yes, the balancing of the budget was great, and good for the economy, but it wasn’t nearly as important as he states relative to other factors. This occurs on both side of the isle, so while annoying, it’s not as if this is a “supply sider”-only club. So while Giuliani’s direct linkage of marginal rate reduction to growth argument is technically wrong, I don’t think this proved Ezra’s above statement.

As well, Chait, Ezra and the likes are entirely too broad in there view of supply side economics. As mentioned in the Thoma post I referenced yesterday, from a purely economic perspective, there are many valid points and assertions beyond just those that are part of the Laffer curve concept.

Posted by: DM | Sep 6, 2007 2:22:29 PM

The correct political comparison to a Republican decrying supply siderism is if a Democrat said we needed to cut Social Security benefits -- he'd be destroyed by the party.

Which is why Representative Allen Boyd is no longer in Congress, and is no longer leading the Stay In Iraq Forever Caucus of House Bush Dogs.

ohhh, wait....

Posted by: mrs. ibrahim al-jafaari | Sep 6, 2007 2:33:30 PM

Hillary clinton won't make a healthcare proposal until jan 2013

Posted by: akaison | Sep 6, 2007 2:55:09 PM

Yeah, you're just wrong Ezra. Expanding Medicare to cover all Americans will very obviously not save the government money.

Posted by: Korha | Sep 6, 2007 4:20:01 PM

Korha is of course right: Medicare for all will probably save money, but it is unlikely to save the government money.

I propose a compromise: medicare for all, and cut taxes, so the increased tax revenue will pay for it! Everybody wins!

Posted by: Warren Terra | Sep 6, 2007 8:05:25 PM

Now that you mention it, it is interesting that Republicans have never suggested the solution to the Social Security problem is to REDUCE the FICA tax.

Posted by: robertl | Sep 7, 2007 7:26:44 AM

The "very strong argument" is actually very wrong as the other comments have pointed out. It's possible maybe even probable that Medicare for all would reduce the total health care spending in America, but it would unquestionably greatly increase the health care spending by the government which would not make it possible to create universal preschool and increase SS benefits like in the hypothetical.

Posted by: Ron | Sep 7, 2007 11:50:09 AM

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