Saturday, April 9, 2011

Paul Ryan's Path to Prosperity-Part 1

Paul Ryan's Path to Prosperity-Part 1

"I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I,
I took the one less traveled by,
And that has made all the difference"
Robert Frost, The Road Not Taken
GOP House Budget Chair Paul Ryan wants us to the take the road (path) less traveled.
His Path to Prosperity was released this week.
He gave the GOP radio address this morning, proclaiming gloom and doom if his path is not taken.
His plan is the opening salvo in what will be a contentious, bitter debate on the future of our “welfare” state.

And I say, bring it on.

The tax proposals should be put aside for now. But, in short, he is a supply-sider par excellance.
He makes Milton Friedman and Ayn Rand into flaming moderates. It is the ol’ horse and sparrow theory. If you feed the horse enough oats, some will fall to the ground to feed the sparrows.

He wants to cut the to personal tax rate to 25%; and ditto the corporate rate.

To Ryan, if you release the entrepreneurial spirit, jobs will be aplenty; a 1000 flowers will bloom.

But unlike Friedman, Ryan is not interested in these lower taxes bringing in more revenue. Instead, Ryan wants a small federal government, and to get there, he advocates cutting $7 trillion over 10 years.

Let’s get to the “entitlements” in Ryan’s path, beginning with Medicare.

Right now, Medicare is a rather efficient single-payer system. It is a defined-benefit program. And users pay about 25% of their medical costs. It needs cost controls; and evaluations of outcomes. But it is popular. All polls,among all age groups, show strong majority support for Medicare.

The young budget guru, number geek Ryan wants to make Medicare a defined-contribution system.

He wants to convert it from a single-payer to a for-profit insurance voucher system.
If his plan existed now, those reaching 65 would go into a private insurance menu (exchange) and choose coverage. The for-profit insurance provider would get a fed. voucher worth $8,000-10,000. There are about 48 million now on Medicare. A 10k voucher for each would give the for-profits 480 billion dollars (if my math is correct).

Assuming the 65 yr. could find an affordable policy.
Assuming the carrier could agree to take the patient.
Assuming there was some requirement to ignor preexisting conditions.
Then the 65 yr. old could enroll.
Once the voucher money is exhausted, the patient is on his(her) own.
Estimates suggest the patient could pay up to 65-70% out of pocket.
But the plan would satisfy Ryan’s,the Cato Institute’s, and the Heritage Foundation’s ideological requirements for patient choice.

The Ryan plan is ludicrous ,laughable, and lamentable.

Let’s get the debate on. And then let’s continue to walk down the path of existing Medicare, with cost controls.

NPR’s Need to Know had a good segment last night on Ryan’s Medicare and Medicaid path, complete with graphics.

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