Krugman’s blog, 6/25/15

There were three posts yesterday.  The first was “Breaking Greece:”

I’ve been staying fairly quiet on Greece, not wanting to shout Grexit in a crowded theater. But given reports from the negotiations in Brussels, something must be said — namely, what do the creditors, and in particular the IMF, think they’re doing?

This ought to be a negotiation about targets for the primary surplus, and then about debt relief that heads off endless future crises. And the Greek government has agreed to what are actually fairly high surplus targets, especially given the fact that the budget would be inhuge primary surplus if the economy weren’t so depressed. But the creditors keep rejecting Greek proposals on the grounds that they rely too much on taxes and not enough on spending cuts. So we’re still in the business of dictating domestic policy.

The supposed reason for the rejection of a tax-based response is that it will hurt growth. The obvious response is, are you kidding us? The people who utterly failed to see the damage austerity would do — see the chart, which compares the projections in the 2010 standby agreement with reality — are now lecturing others on growth? Furthermore, the growth concerns are all supply-side, in an economy surely operating at least 20 percent below capacity.

Talk to IMF people and they will go on about the impossibility of dealing with Syriza, their annoyance at the grandstanding, and so on. But we’re not in high school here. And right now it’s the creditors, much more than the Greeks, who keep moving the goalposts. So what is happening? Is the goal to break Syriza? Is it to force Greece into a presumably disastrous default, to encourage the others?

At this point it’s time to stop talking about “Graccident”; if Grexit happens it will be because the creditors, or at least the IMF, wanted it to happen.

Yesterday’s second post was “Regicide Relief:”

Update: Just to put this out there, and let my 60s roots show: Hey, hey, ACA, how many lives did you save today?

King (v Burwell) is dead, 6-3. Whew. I’ve been tuned in toSCOTUSblog, sort of watching out of the corner of my eye — and it’s too early for a drink! The invaluable Charles Gaba seems to be having his own reaction:

No, you haven’t — reminding everyone of the incredible harm from a bad ruling surely played some role in the good news.

Importantly, the court didn’t even allow wiggle room for a future Tea Party president to decide to cut off the money.

A very big day.

The last post yesterday was “The Court and the Three Legged Stool:”

Still on a high over the Supreme Court ruling. One especially gratifying and praiseworthy feature of the majority opinion was that it explicitly invoked the logic of health reform to justify the “interpretive jiggery-pokery” (can this be made into a dance step?) that so infuriated Scalia. From the opinion:

The combination of no tax credits and an ineffective coverage requirement could well push a State’s individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner. Congress made the guaranteed issue and community rating requirements applicable in every State in the Nation, but those requirements only work when combined with the coverage requirement and tax credits. It thus stands to reason that Congress meant for those provisions to apply in every State as well.

Yes! The Court (minus the three stooges) understood that the ACA is designed to work via the “three-legged stool” of guaranteed issue and community rating, the individual mandate, and subsidies. All three elements are needed to make it work, which is why it was obvious to anyone who paid any attention that the lawsuit was nonsense.

The thing is, a lot of people on the right have never grasped this logic, either because all they need to know is that Obamacare is eevil big government, or because of the Upton Sinclair principle of finding it difficult to understand something when your salary depends on your not understanding it. But the court majority did the basic policy analysis, which gratifies my inner wonk as well as my outer health reformer.

Advertisements

Tags:

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: