Bobo’s wringing his hands over the stimulus package in “Cleaner and Faster.” He whines that the Democrats have created a stimulus package that is a sprawling, undisciplined smorgasbord. By trying to do everything all it once, the bill does nothing well. STFU, Bobo, until your team comes up with some idea other than cutting taxes and piddling their pants over condoms. Moron. Mr. Krugman thought that, 10 days into the new administration, it would be a good time to slap Obama around a bit about “Health Care Now.” His question: Why has the Obama administration been silent about one of the key promises during the campaign — the promise of guaranteed health care for all Americans? Here’s Bobo:
Throughout 2008, Larry Summers, the Harvard economist, built the case for a big but surgical stimulus package. Summers warned that a “poorly provided fiscal stimulus can have worse side effects than the disease that is to be cured.” So his proposal had three clear guidelines.
First, the stimulus should be timely. The money should go out “almost immediately.” Second, it should be targeted. It should help low- and middle-income people. Third, it should be temporary. Stimulus measures should not raise the deficits “beyond a short horizon of a year or at most two.”
Summers was proposing bold action, but his concept came with safeguards: focus on the task at hand, prevent the usual Washington splurge and limit long-term fiscal damage.
Now Barack Obama is president, and Summers has become a top economic adviser. Yet the stimulus approach that has emerged on Capitol Hill abandoned the Summers parameters.
In a fateful decision, Democratic leaders merged the temporary stimulus measure with their permanent domestic agenda — including big increases for Pell Grants, alternative energy subsidies and health and entitlement spending. The resulting package is part temporary and part permanent, part timely and part untimely, part targeted and part untargeted.
It’s easy to see why Democrats decided to do this. They could rush through permanent policies they believe in. Plus, they could pay for them with borrowed money. By putting a little of everything in the stimulus package, they avoid the pay-as-you-go rules that might otherwise apply to recurring costs.
But they’ve created a sprawling, undisciplined smorgasbord, which has spun off a series of unintended consequences. First, by trying to do everything all it once, the bill does nothing well. The money spent on long-term domestic programs means there may not be enough to jolt the economy now (about $290 billion in spending is pushed off into 2011 and later). The money spent on stimulus, meanwhile, means there’s not enough to truly reform domestic programs like health technology, schools and infrastructure. The measure mostly pumps more money into old arrangements.
Second, by pumping so much money through government programs, the bill unleashes a tidal wave on state governments. A governor with a few-hundred-billion-dollar shortfall will suddenly have to administer an additional $4 billion or $5 billion. That money will be corrosive both when washing in, and when it disappears in a few years time.
Third, the muddle assures ideological confrontation. A stimulus package was always going to be controversial, because economists differ widely about whether or how a stimulus can work. But this bill also permanently alters the role of the federal government, thus guaranteeing a polarizing brawl at the very start of the Obama presidency.
Fourth, Summers’s warnings about deficits have been put aside. There is no fiscal exit strategy. Instead, permanent spending commitments are entailed with no permanent funding stream to pay for them.
Fifth, new government expenditures on complex matters are being designed on a hasty, reckless timetable. As readers may know, the policy I am most passionate about is pre-K education. Yet I fervently hope that the Head Start expansion is dropped from this bill. A slapdash and shambolic expansion could discredit the whole idea.
Wise heads are now trying to restore structure and safeguards to the enterprise. In testimony this week, Alice Rivlin, Bill Clinton’s former budget director, raised the possibility of separating the temporary from the permanent measures and focusing independently on each. “A long-term investment program should not be put together hastily and lumped in with the anti-recession package,” Rivlin testified. “The elements of the investment program must be carefully planned and will not create many jobs right away.”
The best course is to return to the original Summers parameters — temporary, targeted and timely — thus making the stimulus cleaner and faster.
Strip out the permanent government programs. Many of them are worthy, but we can have that debate another day. Make the short-term stimulus bigger. Many liberal economists have been complaining it is too small, so replace the permanent programs with something like a big payroll tax cut, which would help the working class.
Add in a fiscal exit strategy so the whole thing is budget neutral over the medium term. Finally, coordinate the stimulus package with plans to shore up the housing and financial markets. Until those come to life, no amount of stimulus will do any good.
This recession is scary and complicated. It’s insane to try to tackle it and dozens of other complicated problems, all in one piece of legislation. Leadership involves prioritizing. Those who try to do everything at once will end up with a sprawling, lobbyist-driven mess that does nothing well.
Just imagine if the tables were turned… Bobo would be screaming and howling about how the horrible Democrats were trying to destroy the country by not voting for the stimulus. Eat shit, Bobo. Here’s Krugman:
The whole world is in recession. But the United States is the only wealthy country in which the economic catastrophe will also be a health care catastrophe — in which millions of people will lose their health insurance along with their jobs, and therefore lose access to essential care.
Which raises a question: Why has the Obama administration been silent, at least so far, about one of President Obama’s key promises during last year’s campaign — the promise of guaranteed health care for all Americans?
Let’s talk about the magnitude of the looming health care disaster.
Just about all economic forecasts, including those of the Obama administration’s own economists, say that we’re in for a prolonged period of very high unemployment. And high unemployment means a sharp rise in the number of Americans without health insurance.
After the economy slumped at the beginning of this decade, five million people joined the ranks of the uninsured — and that was with the unemployment rate peaking at only 6.3 percent. This time the Obama administration says that even with its stimulus plan, unemployment will reach 8 percent, and that it will stay above 6 percent until 2012. Many independent forecasts are even more pessimistic.
Why, then, aren’t we hearing more about ensuring health care access?
Now, it’s possible that those of us who care about this issue are reading too much into the administration’s silence. But let me address three arguments that I suspect Mr. Obama is hearing against moving on health care, and explain why they’re wrong.
First, some people are arguing that a major expansion of health care access would just be too expensive right now, given the vast sums we’re about to spend trying to rescue the economy.
But research sponsored by the Commonwealth Fund shows that achieving universal coverage with a plan similar to Mr. Obama’s campaign proposals would add “only” about $104 billion to federal spending in 2010 — not a small sum, of course, but not large compared with, say, the tax cuts in the Obama stimulus plan.
It’s true that the cost of universal health care will be a continuing expense, reaching far into the future. But that has always been true, and Mr. Obama has always claimed that his health care plan was affordable. The temporary expenses of his stimulus plan shouldn’t change that calculation.
Second, some people in Mr. Obama’s circle may be arguing that health care reform isn’t a priority right now, in the face of economic crisis.
But helping families purchase health insurance as part of a universal coverage plan would be at least as effective a way of boosting the economy as the tax breaks that make up roughly a third of the stimulus plan — and it would have the added benefit of directly helping families get through the crisis, ending one of the major sources of Americans’ current anxiety.
Finally — and this is, I suspect, the real reason for the administration’s health care silence — there’s the political argument that this is a bad time to be pushing fundamental health care reform, because the nation’s attention is focused on the economic crisis. But if history is any guide, this argument is precisely wrong.
Don’t take my word for it. Rahm Emanuel, the White House chief of staff, has declared that “you never want a serious crisis to go to waste.” Indeed. F.D.R. was able to enact Social Security in part because the Great Depression highlighted the need for a stronger social safety net. And the current crisis presents a real opportunity to fix the gaping holes that remain in that safety net, especially with regard to health care.
And Mr. Obama really, really doesn’t want to repeat the mistakes of Bill Clinton, whose health care push failed politically partly because he moved too slowly: by the time his administration was ready to submit legislation, the economy was recovering from recession and the sense of urgency was fading.
One more thing. There’s a populist rage building in this country, as Americans see bankers getting huge bailouts while ordinary citizens suffer.
I agree with administration officials who argue that these financial bailouts are necessary (though I have problems with the specifics). But I also agree with Barney Frank, the chairman of the House Financial Services Committee, who argues that — as a matter of political necessity as well as social justice — aid to bankers has to be linked to a strengthening of the social safety net, so that Americans can see that the government is ready to help everyone, not just the rich and powerful.
The bottom line, then, is that this is no time to let campaign promises of guaranteed health care be quietly forgotten. It is, instead, a time to put the push for universal care front and center. Health care now!
