Krugman: Ditch The Tax Cuts, Fund Universal Health Care

[WillYourVoteBCounted]

Ideas for Obama
By PAUL KRUGMAN New York Times.
Published: January 11, 2009

Last week President-elect Barack Obama was asked to respond to critics who say that his stimulus plan won’t do enough to help the economy. Mr. Obama answered that he wants to hear ideas about “how to spend money efficiently and effectively to jump-start the economy.”

O.K., I’ll bite — although as I’ll explain shortly, the “jump-start” metaphor is part of the problem.

First, Mr. Obama should scrap his proposal for $150 billion in business tax cuts, which would do little to help the economy. Ideally he’d scrap the proposed $150 billion payroll tax cut as well, though I’m aware that it was a campaign promise.

Money not squandered on ineffective tax cuts could be used to provide further relief to Americans in distress — enhanced unemployment benefits, expanded Medicaid and more. And why not get an early start on the insurance subsidies — probably running at $100 billion or more per year — that will be essential if we’re going to achieve universal health care?
....

Universal health care would make it easier for US manufacturers to compete with the other industrialized countries and decrease the number of bankruptcies caused by medical bills. Right now we are greatly handicapped by huge costs of corporate sponsored health care. It is starting to cost more and more to the employees, and paying less and less too.

Obama needs to listen to Krugman.

[BrklynLiberal]

1. Sounds like a good place to start..

[Cleita]

2. Paul Krugman really trying to get the powers to be to listen to him.

I hope they do listen.

[patrice]

3. Please listen to Paul Krugman, President Obama!

Thom Hartmann says that the cut in payroll tax could drive paychecks down, because employers would then know, since employees WERE previously working for a lesser amount, what the least amount they can get away with offering for a job is, when the job turns over.

And I never believed that any money businesses don't pay in taxes ever comes back to us anyway.

It seems to me that Universal Health Care would have a more permanent benefit to EVERYONE than tax cuts do.

[Idealism]

4. Professor Krugman is right about 98% of the time

This is definitely one of them :D

[grilled onions]

5. I'm For It!

Many of us our mired down by the cost of meds. How can we save or buy anything when almost all our spare change goes into daily meds? So many would actually be healthier if they knew they could afford to see a doctor or not have to cut their meds in half to stretch them. Physically,mentally,emotionally--everything somehow goes back to health care. We need it now.

[Donnachaidh]

6. k&r for SANITY

UNIVERSAL healthCARE - no more profits for insurance companies that have let how many countless people DIE because of their profit margin.

Take the for-profit OUT of healthcare. Let the HMO's and the insurance companies wither and die, rather than the citizens.

[aquart]

7. I constantly agree with this man.

[chill_wind]

8. K&R. Obama the pragmatist vowed he would listen to any/all better ideas, right?

Right?

[Dumak]

9. Universal health care would of course save quite a bit of money

by removing the insurers from the equation and by focusing more on preventive care. In addition, we should reduce medical patents (preferably ALL patents) to 3-5 years in duration. That would lower drug costs, and still give researchers a few years to make some profit. But basic health care should be a not-for-profit industry. If the US government can do space research, then it can do the medical research.

Perhaps the biggest obstacle to all this is that Republicans, by their nature, want to see poor people suffer as much as possible. No, I'm not being facetious here, I've known enough Republicans to know this is true. Muslim kids being killed in Iraq? -- the more the better. Poor people having to walk or take a bus to the polling place? - "It's good to make it difficult for people to vote".

[eridani]

10. Except that we din't need another shot of money to fix health care financing

We are already paying for universal health care! We just aren’t getting it!

We have a lot of very serious problems right now that will require large infusions of taxpayer cash to solve. You’d think that we'e be delighted that solving one of them requires no more money than we are already spending on it right now—health care financing. The catch is that the money we are now wasting on private insurance would have to be put into a public health financing trust and used to pay for actual care.

[OneBlueSky]

11. didn't Krugman recently win some prize or other for his economics writing? . . .

geez, Barack . . . sounds like this is someone you should listen to . . .

bottom line, Mr. President-Elect . . . if you want to initiate change, you can't do it piecemeal or with a mindset that mimics that of your predecessor . . . the situation we face is dire enough that real, substantive, innovative, earth-shattering change is about the only thing that has even a chance of making a real difference . . .

tax cuts won't cut it . . . multi-billion dollar bailouts won't cut it . . . but universal healthcare? . . . that would indeed be a good start -- and would certainly constitute some REAL change . . .

there's change, Mr. Obama, and then there's CHANGE!!! . . . if you want to make a real difference, I suggest you opt for the latter . . . beginning on Day One, and continuing every day thereafter . . .

[1776Forever]

12. Yes Yes Yes - PE Obama should make Krugman a new position - Krugman the Wizard

He seems to have more good answers then anyone else that PE Obama has on his staff right now!

[supernova]

13. Oh, if only...

:loveya: PK!

I would love for people to pay as much attention to him and enact his words as they do that idiot Milton Freidman.

[WillYourVoteBCounted]

14. my cousins in New Zealand and Australia have had public health care for years

and you can purchase private insurance if you want private treatment, but
everybody gets care.

They are shocked at our system.

[DarleenMB]

15. WRONG WRONG WRONG

Universal health care is NOT THE ANSWER.

Regulating the piss out of the insurance "industry" and the health care "industry" is what needs to be done. FOR PROFITS need to be removed from health care entirely.

I'm getting tired of beating this drum but no one is listening. Everyone thinks universal health care is the be all to end all. It is NOT.

30+ years ago I paid about $5 a month for full coverage health insurance. FULL COVERAGE. I had an appendectomy. totally paid for.

I had cartilage removed from my right knee. TOTALLY PAID FOR.

10 years later when Reaganomics had taken hold I had to have that knee repaired. The insurance company (and we had EXCELLENT insurance) refused to pay about 1/3 of the bill then only paid 80% of what was left.

When the FOR PROFITS GANG shows up, hide your silverware. Hospitals used to be owned by the local community. Insurance paid out to the insureds what was needed, not to the "investors" who had their hands out and now take precedence, according to the CEO's who are stealing money right and left, over the insureds.

ANY time business interests show up, prices go up. communities used to own the local power plant. Not any more. When FOR PROFITS show up to buy up your water treatment plant it's time to get out the pitchforks and torches.

[Vincardog]

17. WTF? Universal health care is NOT THE ANSWER? You want to keep the parasitic Insurance companies in

the loop?
I say universal single payer is the answer and eliminate the insurance companies all together.
The financial parasites applauded when my IT job was sent to india.
Why not replace them with a more efficient system?

[WillYourVoteBCounted]

18. we only need to look at other countries that have had UHC single payer for decades

everyone gets health care.

If you want "deluxe" health care, and have the money to pay for it, you
can purchase insurance from the parasitic insurance companies.

The right wingers don't want UHC or Single payer, they want to subsidize ins
companies like Medicare D, and they know that most of our
public is ignorant about the truth.

Thats why Sicko can't get on regular airwaves.

[wroberts189]

21. instead of paying high ins premiums ..people would spend it helping the economy . n/t

[wroberts189]

22. woops..meant to reply to topic OP ..sorry

[Vincardog]

25. No problem that was my point exactly

[lumberjack_jeff]

23. You're not making any sense. Health care is unaffordable BECAUSE it's not universal. n/t

[mzmolly]

16. "Obama needs to listen to Krugman"

Absolutely agree.

[tosh]

19. Thank you, Professor Krugman!

[applegrove]

20. Universal health care would help business make payroll.

[cascadiance]

24. A simple fix to the payroll tax (social security tax)

Would make it instantly progressive instead of regressive, even if it would be a flat tax rate.


Social security payroll tax

Currently:

7.65% both from employee and employer on first $97.5 k

for employees making $97.5 K currently:
--------------------------------------
Employer pays $7458.75
Employee pays $7458.75
----------------------
Total is: $14917.50

For employees making $250 K currently:
-------------------------------------
Employer pays $7458.75
Employee pays $7458.75
----------------------
Total is: $14917.50


Income of a million annually:
----------------------------
Employer pays $7458.75
Employee pays $7458.75
----------------------
Total is: $14917.50

-------------------------------------------------------------------------------------------------------------------------------------------
Now simply remove the cap altogether and lower the effective tax rate to 2.9835% the EMPLOYEE has to pay! Everyone at $250k or under either stays the same rate ($250k) or gets a tax cut. Everyone over $250k gets a payroll tax hike.
Now we could also drop the employer tax rate too, to make those around $250k less of a tax liability to corporations, but as a progressive tax, I think it would still work to help employers see more value at cutting people from the top with layoffs than from the bottom!

for employees making $97.5k then:
---------------------------------
Employer pays $7458.75
Employee pays $2908.91
-----------------------
Total is: $10367.66

For employees making $250k then:
--------------------------------
Employer pays $19125.00
Employee pays $7458.75 (no more, no less than before)
-----------------------
Total is: $26583.75

Income of a million annually:
----------------------------
Employer pays $76500.00
Employee pays $29835.00
-----------------------
Total is: $106335.00

[chill_wind]

26. ...

[eridani]

27. But we don't need more money for universal health care

We are already paying for universal health care--we just aren't getting it. Take the money wasted by private insurance and spend it on health care.

[fed_up_mother]

28. If only Obama would do this.

There would be SO MANY benefits from this plan!

[RedEarth]

29. Terrific idea