Friday, October 31, 2014

Three Big Things We Must Do

Let's face it: the Democrats are tapped out. Back in 2008 they thought they were going to roar to a generational dynasty. Their Obamacare would give everyone affordable health care; their Keynesian stimulus would bring the economy back, and their green energy program would heal the world.

In fact Obamacare has been a experimental verification of Hayek and Buchanan: big government bureaucrats cannot organize the economy. Stimulus has been yet another proof that Keynes is all wet. And the death of fossil fuel has been greatly exaggerated. And has for wind and solar, words fail me.

That's why Democrats are reduced to beating their base voters to the polls with wars on women and returns to Jim Crow. And I thought the cowskin whip went out with slavery.

It's not just the big things where liberal are wrong; it's the little things too, as Kate Bachelder writes in the Wall Street Journal, listing "The Top 10 Liberal Superstitions."

  1. More money helps education
  2. Government spending stimulates the economy
  3. GOP candidates have more money than Dems
  4. Raising minimum wage helps the poor
  5. Global warming causes violent weather
  6. GM food is dangerous
  7. Voter ID laws are racist
  8. Obamacare is gaining popularity
  9. Keystone XL pipeline will cause oil spills
  10. Women are paid 77 cents on the dollar
But never mind all that. What should Republicans do if they get into power in 2014 and 2016? What three big things? Here's my agenda.

Get out of QE and ZIRP. That's the Fed's "quantitative easing" and its "zero interest rate policy." I don't know exactly how we are going to do this without another recession, but it is essential to get back to a "normal" economy. That means normal interest rates, declining debt as percent of GDP, and an end to the subsidy for home mortgages with Fannie and Freddie.

Fix the economy. I'd say that a tax reform package to balance rate cuts with tax loophole elimination would be a start. Then a redo of the hyper-regulation in Sarbanes-Oxley and Dodd-Frank. Then an end to green energy subsidies and frack, baby, frack.

Redo Obamacare. I'd say the thing to do is to turn the subsidies on the Obamacare exchanges into "mini-med" plans that subsidize routine health care for the working poor. Since the working poor don't have assets they don't need catastrophic insurance coverage, because they can just declare bankruptcy. For the rest of us, just clear out all the mad mandates and regulations and let us buy the insurance coverage that makes sense. For a real stretch, slowly remove the tax deductibility of corporate health plans so that corporations push health care onto their employees who then have an interest in getting the best bang for the buck.

I'm in the middle of reading Charles Murray's In Our Hands: A Plan to Replace the Welfare State. His idea is to replace all social programs, Social Security, Medicare, Medicaid, welfare, student loans, housing subsidies (but not K-12 education) with a simple $10,000 per year grant paid to each American over 21 for as long as they live. Of this, $3,000 would be a lifelong health insurance plan. He thinks it would encourage the poor to work (because they wouldn't be facing their current 50% plus marginal tax rate) and also encourage the poor to marry (because there wouldn't be an advantage to single-motherhood). It's pretty intriguing, but it's clearly a "nuclear option" that looks like pie in the sky. At least for now. Here's The Atlantic saying it won't work 'cos the numbers don't add up.

Never mind about the nuclear option. What we can do is make a start: on the Fed, on growth and energy, and Obamacare. Let's do it.

2 comments:

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  2. Interesting that economic history shows an economy consistently performs better under a Democratic president after having been under Republican rule.

    And sure, let's have an economy where people just declare bankruptcy to avoid debts, usually medical debts, as was the case pre Obamacare.

    Under your plan will doctors and hospitals still be required to treat people who have previously declared bankruptcy to avoid medical bills and who need expensive life saving treatment or those who need such treatment and who have no assets to cover it but have not previously been declared bankrupt?

    And poor people have no assets. What about those who may have inherited a house and therefore have no debt on it and all their money goes to clothe and feed themselves? It's ok for them to lose their family home to pay medical bills??

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