Bernie Sanders Easily Prevails in the Free-Stuff Primary

In an amazing display of incompetence, we still don’t know whether Bernie Sanders or Pete Buttigieg won the Iowa caucus.

This has created some opportunities for satire, with people asking how a political party that can’t properly count 200,000 votes somehow can effectively run a healthcare system for 340 million people.

That’s a very good point, but today let’s focus on a contest that does have a clear winner.

As explained in this video, John Stossel and his team crunched the numbers and they have concluded that “Crazy Bernie” wins the free-stuff primary.

Senator Sanders doubtlessly will be very happy with this victory, especially since he trailed Kamala Harris when Stossel did the same calculations last summer.

America’s taxpayers, however, might not be pleased with this outcome. Especially if Bernie Sanders somehow gets to the White House.

Last week, I shared new numbers from the Congressional Budget Office, which showed that the federal budget is now consuming $4.6 trillion.

Bernie Sanders is proposing a staggering $4.9 trillion of new spending – more than doubling the burden of government spending!

And the 10-year cost of his promises could be as high as $97 trillion.

To make matters worse, all this new spending is in addition to already-legislated spending increases for everything from boondoggle discretionary programs to behemoth entitlement programs.

Hello Greece.

Heck, it may be hello Venezuela if Bernie gets unleashed.

P.S. Trump’s record on spending is bad, though his mistakes are measured in billions rather than trillions.

Read Full Post »

The “Public Option” Is a Slow-Motion Version of Medicare-for-All

Government intervention has made a mess of health care in America. Programs such as Medicare and Medicaid, along with the tax code’s healthcare exclusion, have created a massive third-party-payer problem.

The inevitable result is systemic inefficiency and ever-rising prices.

Some politicians look at these government-created problems and want us to believe that the right solution is to have even more government.

Consider, for example, the radical Medicare-for-All scheme that is supported by “Crazy Bernie” and “Looney Liz.” That’s like driving in the wrong direction at 100 miles per hour.

It’s also a bad idea to head the wrong direction at 50 miles per hour.

In a column for the Wall Street Journal, Lanhee Chen exposes the reckless nature of the so-called public option that is supported by other candidates.

Joe Biden, Pete Buttigieg and Mike Bloomberg claim they’re proposing a moderate, less disruptive approach to health-care reform when they advocate a public option—a government policy offered as an alternative to private health insurance—in lieu of Medicare for All. Don’t believe it. …those effects are predicated on two flawed assumptions: first, that the government will negotiate hospital and provider reimbursement rates similar to Medicare’s fee schedules and far below what private insurers pay; second, that the government would charge “actuarially fair premiums,” which cover 100% of provided benefits and administrative costs.

Mr. Chen explains that politicians can’t resist buying votes by offering ever-more goodies at ever-lower costs (I made similar points in a video explaining why Obamacare would be a fiscal boondoggle).

Political pressure upended similar financing assumptions in Medicare Part B only two years after the entitlement’s creation. The Johnson administration in 1968 and then Congress in 1972 had to intervene to shield seniors from premium increases. Objections from health-care providers to low reimbursement rates have regularly led to federal spending increases in Medicare and Medicaid.

And when politicians offer more goodies at lower cost, that means someone else will have to pay.

Either taxpayers today (higher income taxes and payroll taxes) or taxpayers tomorrow (more borrowing).

If premiums can’t rise to cover program costs, or reimbursement rates are raised to ensure access to a reasonable number of providers, who’ll pay? Taxpayers… If Congress’s past behavior is a guide, a public option available to all individuals and employers would add more than $700 billion to the 10-year federal deficit. The annual deficit increase would hit $100 billion within a few years. Some 123 million people—roughly 1 in 3 Americans—would be enrolled in the public option by 2025, broadly displacing existing insurance. These estimates don’t include the costs of additional Affordable Care Act subsidies and eligibility expansions proposed by Messrs. Biden, Buttigieg and Bloomberg. …if tax increases to pay for a politically realistic public option were limited to high-income filers, the top marginal rate would have to rise from the current 37% to 73% in 2049… Congress could enact a new broad-based tax similar to Medicare’s 2.9% Hospital Insurance payroll tax. The new tax would be levied on all wage and salary income and would reach 4.8% in 2049.

Mr. Chen also reminds us that the public option would surely have a very bad effect on private insurance.

Beyond fiscal considerations, the public option would quickly displace employer-based and other private insurance. …Consumers seeking coverage would be left with fewer insurance options and higher premiums. …Longer wait times and narrower provider networks would likely follow for those enrolled in the public option, harming patients’ health and reducing consumer choice.

For those of you who like lots of numbers, I also recommend a new report from the Committee for a Responsible Federal Budget.

The folks at CRFB are a bit misguided in that they focus too much on deficits and debt when they should be mostly concerned about the size of government.

But they do reliable work and their new report, Primary Care: Estimating Leading Democratic Candidates’ Health Plans, is filled with horrifying data.

We’ll start with this table looking at the details of the plans that have been put forth by Biden, Buttigieg, Sanders, and Warren. The red numbers are new spending. The black numbers are offsets (mostly tax increases).

As you can see from the above table, Warren and Sanders are definitely in the go-rapidly-in-the-wrong-direction camp.

But that shouldn’t distract us from the fact that Biden and Buttigieg also are proposing a big expansion in the burden of government.

Here’s another graphic from the CRFB report, but I’m focusing solely on the numbers for Biden and Buttigieg so that it’s clear to see that they both want about $2 trillion of new spending over the next decade.

If you look closely at the numbers for Buttigieg in Figure 2, you’ll notice that his health plan supposedly will reduce the deficit by $415 billion over 10 years (the difference between $3.3 trillion of new spending and $2.85 trillion of cost reductions and offsets).

Does that make his plan desirable? Of course not. What he’s really proposing (and this is how CRFB should have presented the data) is $1.65 trillion of net new spending (the difference between his “new spending” and his “cost reductions” ) accompanied by $2.1 trillion of new taxes.

P.S. Most of the “cost reductions” in Buttigieg’s plan are achieved with price controls on prescription drugs. At the risk of understatement, that’s a very costly way of trying to save money.

P.P.S. And if his plan is ever enacted, don’t forget that the actual amount of “new spending” will be much higher than the estimate of “new spending.”

Read Full Post »

Buttigieg’s Greek-Style Fiscal Policy

Candidates such as Elizabeth Warren and Bernie Sanders supposedly are competing for hard-left voters, while candidates such as Joe Biden and Pete Buttigieg are going after moderate voters. But a review of Buttigieg’s fiscal policy suggests he may belong in the first category.

In the interview, I focused on Buttigieg’s plan to subsidize colleges. Hopefully, I got across my main point is that students won’t be helped.

Based on what’s happened with the “third-party payer” subsidies that already exist, colleges and universities will simply jack up tuition and fees to capture the value of any new handouts.

I’m not the only person to speculate that Buttigieg is simply a watered down version of Warren.

The Wall Street Journal opined today on Mayor Pete’s statist agenda.

Mr. Buttigieg has risen steadily in the Real Clear Politics polling average to a solid fourth place, with about 7% support. …on Friday he released what he called “An Economic Agenda for American Families.” For a candidate who wants to occupy the moderate lane, Mr. Buttigieg’s policy details veer notably left. …$700 billion—presumably over 10 years, but the plan doesn’t specifically say—for “universal, high-quality, and full-day early learning.” …$500 billion “to make college affordable.” That means free tuition at public universities… $430 billion for “affordable housing.” …$400 billion to top off the Earned Income Tax Credit… A $15 national minimum wage.

At the risk of understatement, that’s not a moderate platform.

This isn’t an economic agenda, and there isn’t a pro-growth item anywhere. It’s a social-welfare spending and union wish list. …Don’t forget the billions more he has allocated to green energy, as well as his $1.5 trillion health-care public option, “Medicare for All Who Want It.” So far Mayor Pete’s agenda totals $5.7 trillion… Mayor Pete’s policy wish list is shorter and cheaper than Elizabeth Warren’s, but it still includes gigantic tax increases to finance a huge expansion of the welfare and entitlement state. Call it Warren lite.

Methinks John Stossel needs to update this video. With $5.7 trillion of new outlays, Buttigieg is definitely trying to win the big-spender contest.

No wonder he’s now embracing class-warfare tax policy. One of his giant tax increases, which I should have mentioned in the interview, is a version of Elizabeth Warren’s “nutty idea” to force people to pay taxes on capital gains even if they haven’t sold assets and therefore don’t actually have capital gains!

And the Washington Post reports that he also wants to increase the capital gains tax rate, even though that will make America less competitive.

By the way, Buttigieg is also a hypocrite. He’s joined with other Democratic candidates in embracing a carbon tax on lower-income and middle-class voters, yet the Chicago Tribune reports that he zips around the country on private jets.

Pete Buttigieg has spent roughly $300,000 on private jet travel this year, more than any other Democrat running for the White House, according to an analysis of campaign finance data. …his reliance on charter flights contrasts sharply with his image as a Rust Belt mayor who embodies frugality and Midwestern modesty. …Buttigieg’s campaign says the distance between its South Bend headquarters and major airports sometimes makes private jet travel necessary. “We are careful with how we spend our money, and we fly commercial as often as possible,” Buttigieg spokesman Chris Meagher said Wednesday. “We only fly noncommercial when the schedule dictates.”

In other words, one set of rules for ordinary people, but exemptions for the political elite.

Though at least he hasn’t proposed to ban hamburgers. At least not yet.

P.S. If you like this cartoon by Gary Varvel, I very much recommend this Halloween cartoon. And he is among the best at exposing the spending-cut hoax in DC, as you can see from this sequester cartoon and this deficit reduction cartoon. This cartoon about Bernie Madoff and Social Security, however, is probably my favorite.

Read Full Post »