[Rhodes22-list] Steve - one last try

Wed Dec 1 16:29:35 EST 2004

The authors are placing blame for the debt on out of control health care 
costs. They say "if" we manage to contain these costs we should be fine. So 
what happens if we don't control medical costs???? And why would one assume 
that we will of a sudden get a handle on escalting medical costs? It seems 
to me a sane person would be concerned about this.

This article seems to support what I have been saying all along. Excessive 
debt is bad and if we don't do something to reduce excessive debt bad things 
will eventually happen to the economy. I never really thought this line of 
thinking was liberal or conservative, just sound economics. My beef with 
Bush is the war, not so much the economy but I still don't like the way he 
is spending.

Based on the article it seems to me if we don't do something to change 
things we will be in deep trouble. This is what some of us have beent trying 
to get you to understand. I say chop welfare, reduce military spending, 
implement a national sales tax or flat tax. Reduce or eliminate corporate 
taxes. Does this sound like a liberal?

Wally

>From: Steve <rhodes2282 at yahoo.com>
>Reply-To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
>To: The Rhodes 22 mail list <rhodes22-list at rhodes22.org>
>Subject: [Rhodes22-list] Robert & Wally Ignorant
>Date: Wed, 1 Dec 2004 09:07:18 -0800 (PST)
>
>Robert & Wally
>Try & digest this.  Since my simple Economic 101
>lesson was to hard for you 2 to understand; here is
>even a better understanding of why the deficit is not
>a problem.  If you can set aside your mineless liberal
>attitudes; the below is a simple understand of the
>deficit and a GREAT Country like the USA can manage
>not only this but several trillion more.
>
>The Forty-Four Trillion Dollar Deficit Scare
>
>by Dean Baker and David Rosnick[1]
>
>             Earlier this summer, a new study
>projecting the size of the budget deficit made
>headlines in the London Financial Times and many other
>major newspapers and news magazines (e.g. “Bush
>Shelved Report on $44,200bn Deficit Fears” Financial
>Times, 5-29-03; A1; All Things Considered, National
>Public Radio, 5-29-03; “The $44 Trillion Hole?”
>CNN/Money 5-29-03). The study, Fiscal and Generational
>Imbalances:  New Budget Measures for New Budget
>Priorities by Jagadeesh Gokhale and Kent Smetters,
>projected that the value of future budget deficits
>would be $44 trillion, more than four times current
>GDP.[2] This projection was taken as a warning of the
>government’s extraordinary profligacy, and the need to
>radically reduce future spending commitments. In
>particular, most news stories reported that the study
>implied a need to reduce Social Security and Medicare
>spending to more manageable levels.
>
>             A somewhat closer examination suggests
>that there is less basis for concern than the $44
>trillion figure implied. Furthermore, the major
>underlying cause of this deficit is not demographics –
>the growing population of elderly – as most reporting
>indicated, but rather a private health care system
>whose costs are exploding out of control. The
>assumption in this study – that private sector health
>care costs continue to explode for the next eighty
>years – would have a devastating impact on the economy
>even if we eliminated all publicly supported health
>care programs. If health care costs are brought under
>control, then the projected deficit would be
>manageable, and not qualitatively different than what
>comparable projections would have indicated in prior
>years.
>
>
>
>
>Putting $44 Trillion in Context
>
>             While the prospects of $44 trillion
>deficits was attention grabbing, it is unlikely that
>many people who heard this projection had a clear idea
>of what it meant. The $44 trillion figure was the
>study’s projection of the present discounted value of
>all future deficits. In other words, the study
>estimated annual deficits through eternity, under the
>assumption that current tax and spending rules
>remained in place. It then summed up these deficits by
>discounting the value of future deficits at a 3.6
>percent real (inflation adjusted) annual rate.
>
>             This figure would only be meaningful to
>people who are accustomed to thinking of present
>discounted values of future income. Since almost no
>one is accustomed to making such calculations (which
>require somewhat arbitrary assumptions about the
>interest rate used, as well as the growth rate), as a
>practical matter, this $44 trillion would be virtually
>meaningless to anyone who heard it. Apart from being
>obviously large, very few readers would be able to
>place this number in a meaningful context.
>
>             It actually is quite easy to express this
>deficit projection in a more meaningful way. If the
>deficit is expressed as a share of future GDP, then it
>is immediately possible to place it in context. The
>study by Gokhale and Smetters actually provides this
>information. The study projects the present discounted
>value of future GDP as $682 trillion (p.37). This
>means that its projected deficit is equal to 6.5
>percent of future GDP, implying that a tax increase of
>6.5 percent of GDP would be needed to close the gap.
>This is far from a trivial sum, but it is not
>necessarily an impossible burden either.
>
>             The tax rate in the United States has
>increased by comparable amounts in prior periods. For
>example, the federal tax burden as a share of GDP grew
>by 4.6 percentage points of GDP between 1950 and 1952,
>rising from 14.4 percent to 19.0 percent.[3] This
>increase was due to the costs of the Korean War. While
>the tax burden did decline somewhat in subsequent
>years, it remained close to its 1952 level, as defense
>spending soared due to the Cold War.
>
>             It is also worth noting that most other
>industrialized nations face far higher tax burdens
>than the United States. According to OECD data, the
>2000 tax share of GDP in the United States, Belgium,
>and Norway were 29.6, 45.6, and 40.3% respectively.
>These higher tax burdens have not prevented the
>economies of these nations from continuing to grow and
>prosper.  Belgium, France and Norway enjoyed higher
>productivity levels than the United States throughout
>the 1990s, despite their higher tax rates.[4]  Many
>countries with far higher tax burdens than the United
>States, such as Denmark, Sweden, and the Netherlands,
>enjoy lower unemployment rates.
>
>             Of course, the prospect of a tax increase
>equal to 6.5 percent of GDP should be taken seriously.
>But it is important to recognize that it is possible
>for the United States to bear this cost, if the
>purpose of the public spending is considered necessary
>and desirable. The country has been willing to incur
>comparable costs in prior periods for national defense
>purposes – without undermining economic growth. In
>principle it could incur these costs to serve other
>ends as well.
>
>
>
>
>The Health Care Cost Explosion
>
>             The other important factor, missing from
>most coverage of this study, is the extent to which
>this projected debt burden is driven by the assumption
>that growth of health care costs would continue to
>outstrip the overall rate of growth of the economy.
>The study assumed that, in addition to the impact of
>demographic factors, annual health care costs would
>rise by 1 percentage point more than the nominal rate
>of GDP growth.
>
>             This assumption about rising health care
>costs is enormously important to the study’s deficit
>projection. If the United States managed to contain
>health care costs, so that apart from demographic
>factors they grew at the same rate as nominal GDP,
>then the projected deficit would be equal to just 1.5
>percent of future GDP, or $10 trillion. While even
>this figure is not a trivial sum, there would be
>little basis for the nation to be too consumed with
>such a deficit projection. This methodology would have
>produced comparable deficit projections for most of
>the last four decades.
>
>             The fact that most of the projected
>deficit is due to projected increases in health costs
>is extremely important. It means that the key problem
>driving this deficit projection is not an out of
>control budget situation, but rather out of control
>health care costs. The rise in health care costs will
>affect both the public and private sector. If the
>projected rise in health care costs proves accurate,
>it will have a devastating impact on the economy even
>if public sector health care programs are eliminated
>altogether. The rate of increase in health care costs
>assumed in these projections implies that health care
>expenditures will consume 30 percent of GDP by 2080.
>This compares to 14 percent of GDP in 2001.
>
>             The projections for rising health care
>costs can be expressed in comparable terms to the
>projections for the budget deficit. We can define a
>prospective “health care deficit” as the extent to
>which health care spending is projected to exceed the
>rate of growth of nominal GDP, adjusted for the aging
>of the population. Using the assumptions in the study,
>this health care deficit is equal to $69 trillion, or
>9.3 percent of GDP. This prospective health care
>deficit is a far greater threat to future living
>standards than the budget deficit.
>
>             Among the industrialized nations, only the
>United States faces this sort of dramatic increase in
>health care costs. Measured as a share of GDP, the
>United States already spends twice as much as the
>average for other OECD nations. In other OECD nations
>the share of GDP devoted to health care spending,
>adjusted for demographic change, has largely
>stabilized in the last two decades. Remarkably, the
>United States has little to show for these vast
>expenditures on health care. Its health care outcomes,
>such as life expectancy and infant mortality rates,
>are near the bottom among industrialized nations. In
>short, there is a compelling case for a fundamental
>reform of the U.S. health care system.
>
>             This is the most fundamental, albeit
>hidden, point of the $44 trillion deficit scare study.
>The United States health care system is broken, and
>desperately needs to be fixed. If nothing is done to
>fix the system, then rising health care costs will
>have a devastating impact on the economy. Part of this
>impact will be felt in the public sector, which pays
>for approximately half of all health care in the
>United States, but the impact on the private sector
>will be equally harmful. Rather than presenting a
>compelling case for the need to get the deficit under
>control, the study by Gokhale and Smetters
>demonstrated the importance of fixing the U.S. health
>care system. If costs continue to rise out of control,
>it will have a devastating impact on the economic
>well-being of future generations.
>
>
>
>
>--- Steve <rhodes2282 at yahoo.com> wrote:
>
> > Robert
> > Kerry tried this with the swift boat Veterans and it
> > didn't work with the American people and your lame
> > attempt to try it with me is useless too!!!!!!!!
> >
> > It you know anything about the economy and/or
> > economic; post your facts.  I have posted mine and
> > they are verifiable and factural.
> >
> > You & Wally are just blowing wind!!!!!!!!  This is
> > just Typical Liberalism.  When you don't know the
> > answer, attack.  You can attack all you & Wally want
> > but you are doing nothing but showing your Ignorant.
> >
> > You have no facts to support your claims on the
> > economy.
> > Steve
> >
> >
> > --- Robert Skinner <robert at squirrelhaven.com> wrote:
> >
> > > Steve wrote:
> > > > Robert
> > > > If you have an brains at all, you would go
> > > research
> > > > this stuff so you might actually educated
> > > yourself.
> > >
> > > On the subject of brains, Mortimer, ipsat
> > loquitor.
> > >
> > > When it comes to education, you show me yours, and
> >
> > > I'll post mine.  Showdown!  Still waiting...
> > >
> > > > You sound like Kerry; just a lot of
> > > bullshit!!!!!!!!
> > >
> > > See above.  See below.  Eschew obfuscation.  Stick
> > > to the point.
> > >
> > > > The facts I am saying are easily justified.
> > LOOK
> > > IT
> > > > UP!!!!!!!!!!!!
> > >
> > > Give me one specific, current, and undisputed
> > > reference
> > > in the field of economics that supports your
> > > statements.
> > > Further, facts, if they be that, do not require
> > > justification.  They require revelation.
> > >
> > > *  That's specific as in title, author, and
> > > publisher.
> > >
> > > *  That's current, as in the last 5 years.
> > >
> > > *  That's undisputed, as in accepted by all
> > economic
> > >
> > > theorists.
> > >
> > > Frankly, I don't think even one such a book
> > exists.
> > >
> > > Therefore, unless or until you produce it, your
> > "Go
> > > look it up!" admonitions are meaningless.
> > >
> > > However, I look forward to enlightenment if you
> > can
> > > provide the citation, and show how it supports
> > your
> > > assertions.
> > >
> > > Failing that, a clear summary of your economic
> > > theory
> > > or theories with clear citations would provide at
> > > least some basis for rational debate.
> > >
> > > Your Nemesis (male, in this case),
> > > Robert Skinner
> > >
> >
>http://www.britannica.com/eb/article?tocId=9055233&query=nemesis&ct=
> > >
> > > P.S.  I must thank you for this continuing
> > badminton
> > > match of messages, Mortimer.  I hope you are
> > > enjoying
> > > it as much as I am.  Edgar Burgen never had it so
> > > good.
> > >
> > > RWS
> > >
> > >
> > ---------------------------------------------------
> > >
> > > > Steve
> > > >
> > > > --- Robert Skinner <robert at squirrelhaven.com>
> > > wrote:
> > > >
> > > > > Steve wrote:
> > > > > > Have you ever even heard of
> > > > > > supply & demand.
> > > > >
> > > --------------------------------------------------
> > > > > Of course, Steve.  The question is whether you
> > > have
> > > > > any education that justifies your
> > "ex-cathedra"
> > > > > statements.  You make a statement, and when
> > > someone
> > > > > disagrees with you, you tell them to go to
> > some
> > > > > unspecified document which you claim as
> > > supporting
> > > > > your position.  Nowhere in your rants have I
> > > seen
> > > > > any list of references that anyone can examine
> > > to
> > > > > see if you have any real basis for your
> > points.
> > > > >
> > > > > Having seen not one shred of credential or
> > > reference
> > > > > to support your position, I have to strongly
> > > doubt
> > > > > your claim to any expertise in matters
> > economic.
> > > > >
> > > > > Some might say: "Put up or shut up."
> > > > >
> > > > > I am content to invite you to reply in a clear
> > > and
> > > > > well-reasoned way, if possible.
> > > > >
> > > > > /Robert Skinner
> > > __________________________________________________
> > > Use Rhodes22-list at rhodes22.org, Help?
> > > www.rhodes22.org/list
> > >
> >
> >
> >
> >
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>
>
>
>
>
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