McCain endorses Will’s Healthcare Plan

July 30, 2008

Back in December I wrote down some details of my free market healthcare reform plan. It appears that McCain has endorsed aspects of my plan. John Goodman (advisor to McCain) in today’s WSJ:

Under the McCain plan, no longer would employers be able to buy insurance with pretax dollars. These payments would be taxable to the employee, just like wages. However, every individual would get a $2,500 credit (and every family would get $5,000) to be applied dollar-for-dollar against taxes owed.

The McCain plan does not raise taxes, nor does it lower them. Instead, it takes the existing system of tax subsidies and treats everyone alike, regardless of income or job status. All health insurance would be sold on a level playing field under the tax law, regardless of how it is purchased.

The impact would be enormous. For the first time, low- and moderate-income families would get just as much tax relief as the very rich when they purchase health insurance. People who must purchase their own insurance would get just as much tax relief as those who obtain it through an employer. Whereas Mr. Obama would continue the current practice of giving the vast bulk of federal help to the rich (through tax subsidies) and the poor (through spending programs), the McCain tax credit would give the most new tax relief to the middle class.

The McCain plan would also encourage all Americans to control costs. The tax credit would subsidize the core insurance that everyone should have. It would not subsidize bells and whistles (marriage counseling, acupuncture, etc.) as the current system does. Since employees and their employers will be paying for additional coverage with aftertax dollars, everyone will have an incentive to compare the value of extra health benefits to the value of other things money can buy. When they eliminate health-care waste, they would get to keep every dollar they save.

The McCain tax credit would be refundable. People could apply $2,500 per person or $5,000 per family to the purchase of health insurance, even if they do not owe any income taxes. Families would not have to wait until April 15 the following year to get their credit. They could obtain the subsidy at the time the insurance is purchased.

The credit would also be transferable. Insurance companies and other intermediaries would be able to help families obtain their credit and apply it directly to health-insurance premiums.

The McCain health plan would allow people to buy insurance across state lines — thus creating a competitive, national market for health insurance. It would provide additional federal money for people who have been denied coverage because of a pre-existing condition, making it easier for people who have lost their insurance to obtain new coverage. It would also encourage Medicare to become a smarter, more efficient buyer of care.

The McCain plan will not solve all our health-care problems. But it has a far better chance of positively reforming the system than any other plan that has been proposed in this campaign season.


The Obama Tax Hike

July 29, 2008

Larry Boskin in today’s WSJ:

States Are in Trouble

July 24, 2008

From Today’s WSJ: States Slammed by Tax Shortfalls

The stumbling U.S. economy is forcing states to slash spending and cut jobs in order to close a projected $40 billion shortfall in the current fiscal year.

…Unlike the federal government, most states are required to balance their budgets. Most have so far resisted tax increases, instead opting for raising prices on things like tolls and college tuition, and cutting back on services like education and health care. Some chose one-time measures such as tapping rainy-day funds that were built up in flusher times.

The housing slump, now well into its second year, is the primary culprit. The decline in home sales has cut into real-estate transfer taxes. Construction spending and employment has declined. Fewer home sales have resulted in lower sales of home furnishings and washing machines, eating into sales taxes.

Of course, for many states, today’s budget woes stem at least partly from expanding their services during good times and not planning enough for the inevitable downturn.


Ahh! The last sentence is only partly true: I would say that at least 95% of the state’ budget woes stem from expanding government too much in the good times of the past few years. This is cold and cynical but here’s my analysis of the current situation:

Many states (New York, New Jersey, California, Maryland, Massachussets all come to mind) have horribly irresponsible governments. These states are run by liberals who use any chance they get to increase the size and scope of the state government. They got their chance too: all of these states participated in the housing bubble. This created a temporary surge in tax revenues. These states increased services and made promises with the expectation that the good times would last forever. Anybody with half a brain (much more than anyone in the New York State Senate has) could have seen that this was a bubble and was not going to end well.

Now that the shit is hitting the fan and the bubble is busting, legislatures in these states are acting like their problems were inevitable. The irony is, if these states raise taxes and fees, they will further encourage the people who live there to get out and move to more responsible states where taxes are lower.

The tendancy of democratically elected governments to overspend (and over-promise) in the good times is a key reason why inflation/debasing of the currency is a virtual guarantee.

Q2 ’08 Portfolio Review

July 23, 2008

The Most Sensitive Political Issue of the Beijing Olympics: Pollution

July 22, 2008

The notoriously toxic Beijing air is already a major story of the 2008 Olympics. Despite drastic measures already underway, the government is unlikely to be able to clean the air enough to satisfy athletes and tourists.

The air pollution issue is going to focus the world’s attention on the unbelievable environmental degradation happening in China. Of course, this is the last thing Chinese officials want. Notable excerpt from WSJ article yesterday: Olympic Athletes Wearing Masks Could Cause China to Lose Face.

U.S. triathlete Jarrod Shoemaker has a decision to make at the opening ceremony of the Olympics next month in Beijing: Should he strap on a mask?

Though the practice is less common today, Chinese for years have worn masks to protect their lungs from the country’s heavy dust and pollution. But foreigners wearing them during the Games this summer — particularly at the opening ceremony broadcast to billions of television viewers around the world? That’s a different matter.

Having foreigners cover their faces at the Olympics could mean a loss of face for the Chinese. “When you’re walking around with a mask on, you’re basically saying, ‘You guys stink,’ ” says Scott Schnitzspahn, performance director of the U.S. triathlon team.

Will Agrees with Al Gore

July 18, 2008

I have never been Al Gore’s biggest fan, but on this we agree:

In a speech not far from the U.S. Capitol, Mr. Gore called for moving the U.S. toward “zero-carbon” electricity over a decade, and reiterated his support for a carbon tax accompanied by a “sharp reduction” in payroll taxes.

MB Changes His Mind on Gold

July 18, 2008

Back in September 2007, Miserly Bastard wrote a post — My Thoughts on Gold — in which he outlined reasons why he thought gold was a bad investment. I responded here with my thoughts on why gold is a good investment.

Now, MB has changed his position and is buying physical gold. Notable excerpt:

A lot of people advocating the purchase of physical gold are anti-federal government, to one degree or another. Maybe not full-on Timothy McVeigh types, but at least suspicious of most federal government actions. I count myself in the latter camp. This is another reason I like physical gold to synthetic gold–you can touch physical gold, and so long as the government doesnt know where you keep it, it’s yours.