This Time, It's Personal
The new buildings commissioner in Chicago is accused of delaying an already-in-process building project because his wife didn't like how it looked.

Accusations abound on many sides, and I have no idea who is telling the truth. Regardless, it does illustrate the potential for abuse that is doubtless exploited from time to time.

It's simple; the more often that official approval is required for this, that, or the other, the more likely that something like what is alleged here really will happen. (permalink)

Gun Control and Foreign Policy
Surfing through the blogosphere, I found "Anonymous" (a prolific author) made an interesting point about conceal-carry laws.

Minnesota's new law has been in effect for almost a year now, and, critics to the contrary, the sky did not fall. In that vein, Anonymous offered a lament that many people who strongly opposed the measure also (in the main) opposed going to war in Iraq, and think that foreign policy should focus on address the so-called root causes of terrorism.

So that's the setup. Here's the quip: (scroll down)
Question: what kind of major cognitive dysfunction is required in order to believe that proven homicidal dictators and mass-murdering terrorists will become reasonable people if given half a chance, while simultaneously believing that your friends, relatives, and neighbors, whom you've known all your life, will become bloodthirsty killers if given half a chance? (permalink)

A Little Anger, Anyone?
There's principled opposition to war (pacifism), and then there's vile anger and hatred.
The Wall Street Journal's James Taranto points readers to an angry left web site that, to put it "politely," calls recently killed-in-action soldier (and former NFL player) Pat Tillman a baby killer. Scroll down to the item marked "The Face of Hate." (permalink)

Michigan Announces New Drug Cartel
The federal government has endorsed the Michigan Multi-State Prescription Drug Initiative. Michigan already has a few states that will pool with them to form a buyer's club, and hopes to attract more.

In a sign that perhaps Governor Granholm recognizes that price controls are not popular, the press release announcing the program says "Unlike typical price control programs - such as Canada's - where the government sets prices, Michigan, Vermont, and Hawaii use a competitive bidding process that allows manufacturers to work with states and lower their prescription drug prices."

In the abstract, there's nothing wrong with government banding together to buy in bulk, and thus save taxpayer dollars. But given that half of all medical care is currently purchased by governments, we could in a de facto sense be on our way to price controls anyway. (permalink)

The People Say: I'm a Bird, Not a Mineral
Governments decree official language use, but the population decides for itself.

Recently I bought a copy of Garner's Modern American Usage, a language reference book that can be read for fun and profit.

Perusing it this morning, I noted this entry:

Michigander; Michiganian; Michiganite. By popular consensus, Michigander is the predominant form, appearing more than twice as often in print as Michiganian (the form decreed by state statute). Michiganite is a rare variant used by the U.S. Government Printing Office.

You read that right. At some point the state legislature got into the act and declared the official term. It was in the 1970s, if I recall, though I can't find it online at the moment. It was probably a resolution rather than a statute, but then again, maybe the matter actually rose to the level of a statute.

There are arguments against each of the terms: Michigander is "rustic" and seems to equate state residents with birds. Michiganite sounds like the name of a mineral. Michiganian is pretentious, and its preferred pronunciation is not clear.

Call me a rustic old bird, but this Michigan native prefers Michigander. The state's two major newspapers are split, though. Last time I checked, the Detroit Free Press prefers Michigander, while the Detroit News takes Michiganian.

By the way, one English professor lays the credit (or blame, if you wish) for Michigander on Abraham Lincoln.

As Ted Nesbitt, a reference librarian, puts the matter on About.Com, "The people have made the decision. And the people probably didn't consult an 'etymological rules.'" (permalink)

Feds Fighting Back Against Medicaid Scams
Medicaid is a state-federal program for health care. The feds kick in money for each dollar a state spends. (The amount varies according to the income of the state). Naturally, this has lead states to use "creative financing" to make it look like they are spending more than they actually are. One trick: "pass some dollars through a public institution like the KU [University of Kansas] Medical Center and recapture them for use elsewhere in the budget, picking up extra federal funds along the way."

But the feds are making new efforts to catch on to these schemes, says Matthew Hisrich, of the Flint Hills Center, in Kansas.

Oh yeah, why should you care about Medicaid? You've heard, perhaps, about how Social Security will eat the federal budget when the baby boomers retire. Or if not that, then Medicare. Well, Medicaid threatens to do the same thing at the state level.

For more on the problem of state scheming, see this Congressional testimony.

Labels: Medicaid

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Who Coined "Taliban Republicans?"
Having come across the term "Taliban Republicans" (or was it "Taliban wing of the Republican Party?") I wondered who coined this term. (Evidently, it must have been someone who thought himself clever.)

There's no definitive way to know, of course. I headed over to Lexis-Nexis, and searched for both terms. The earliest "hit" I found was from the letters section of the Chicago Sun-Times, on October 23, 1998. Since I decided to not pay the $3 to click through from the headline to the article itself, I'm not sure what the context was. But there were other references in the next several months that followed, also in letters sections of other papers, including (if I recall correctly) the Dallas Morning News.

Since I had already paid for my local county library's operation through property taxes, I headed over to their search engine and performed the same hits. Nothing new there. Now if Google could just return hit result in the order of when a page was last updated. (permalink)

Football is not War. War is War.
Old-time college football coaches and showboating NFL players compare football with war. One who knew both fake war and real war was Pat Tillman, who left an NFL career to join the Army Rangers. He was killed in action a few days ago, in Afghanistan.

The guys at Powerlineblog have as good a tribute as any I've seen in my brief reading about Tillman. An excerpt: "Stalin, who was neither stupid nor crazy, said that a single death is a tragedy, whereas a million deaths are but a statistic. It is true that the human imagination fastens on to single personalities, not casualty statistics. There is no reason to apologize for the fact that Tillman, a professional athlete who turned away from millions of dollars in salary to serve his country as an Army Ranger, is better known to the public than other Americans who have sacrificed equally. He is as good a symbol as any to stand for them all."

Driving back from a round of golf this morning, I caught the end of an interview on NPR. The interview subject, whoever he was, said that Tillman should not become a "plastic saint." Well, yes, if for no other reason that like all men, he had bad as well as good qualities. But the comment struck a very sour note.

An all who are in harm's way deserve our thanks and admiration. And if they fall, we mourn, as well as celebrate their lives. (permalink)

Left vs. Right in St. Paul
Last night I took in a debate between David Corn (L) and Rich Lowry (R) at St. Thomas University in St. Paul, Minn.

I did not keep a scorecard, nor did I take any notes. In fact, I went purely for the entertainment value. Though I usually don't watch much verbal sparring on TV (the golden age of The McLaughlin Group was long ago), I thought that in-person viewing would be worth the trouble.

I was not disappointed. On the whole, the evening was one of a spirited though controlled set of disagreements. The moderator could have done a better job of keeping the two principals within some time limits, and I had a hard time hearing his voice. (Perhaps he didn't speak up, or perhaps the tone of his voice was such that it did not travel well.)

Most of the evening was taken up with foreign policy (Afghanistan, Iraq) and the economy (jobs, growth, the deficit).

There were, perhaps 150 people in attendance (note: I'm terrible at estimating these sorts of numbers). Most of whom were, appropriately enough, college-aged. After about an hour (perhaps) of questions from the moderator, the floor was opened to the audience, and then it got even more interesting.

IN THE FORM OF A QUESTION, PLEASE
Here's where I thought the moderator could have taken some control, with some guidance like this: "Please put your comments in the form of a question to the panelists, and not in the form of a statement." It is possible, after all, to make a point and launch a salvo with even a brief, unfair question, if that's what you'd like. (When did you stop beating your wife?) But if you go on and on with a long, rambling statement before getting to the question, you're just wasting everyone's time. If I want to know what Joe Blow in the audience thinks, I would invite him out for drinks. This was the time for the panelists, however. Let me listen to them, please.

One college student demonstrated this rage-as-statement problem very well. Apparently he felt (and it seemed that his "feeling" was leading him, not his thoughts) that one of the greatest problems with life in America was that the same "crap" could be heard on the radio coast-to-cast. Who would have thought that Clear Channel's purchase of FM stations was such a threat to the republic? (Here's a hint: buy a CD player for your car and spin your own tunes). He was also down on the fact that perhaps radio DJs would not be able to say the seven dirty words on the air. Apparently, being unable to speak vulgar slang on the radio is just one slippery step away from fascism (a word that has lost all meaning) and the SS in the streets.

On the other hand, one college student sitting nearby surprised me when she actually posed a brief, thoughtful question. Throughout the evening, she made her antipathy towards George W. Bush apparent in her tween-ager snickers and laughter in response to various comments about Bush from the panelists. But when it came to question time, she asked, with no hysterics or foaming-mouth-anger, an intelligent and challenging question about the military operations in Afghanistan.

A high school student from "the middle of nowhere, Wisconsin" asked an intelligent question about statistics used to gauge job growth. Maybe he was home-schooled.

On the other hand, one of the re-elect Bush students asked an inane question which implied that, well, wasn't John Kerry foolish for trying to recruit students for his campaign. Oh? When college is by nature a left-leaning environment, when many college students are, effectively, living a life subsidized at taxpayers expense, why wouldn't a Democratic candidate seek help from the college crowd?

IF YOU DON'T PAY TAXES, YOU DON'T GET A TAX CUT
Which brings me to one of my favorite (or at least most frequently-discussed) topics, taxes. Corn advocated repealing (or perhaps "delaying"--perhaps like all those "temporary" government programs") the Bush tax cuts "for the wealthy." Repealing a tax cut was not, he insisted, a tax cut. Sure, you could argue, as he did, that the economy had changed, that government needed more money for this or that. But if it talks like a duck, and walks like a duck ... (to mix the metaphor), it's a tax increase.

Here was the shocker (and most pleasant event) of the night. Corn, seeking to justify his position, asked "How many in this room support tax cuts for people earning over $200,000 a year?" Now, my income is somewhere south of that that number, but I rose my hand, as did at least half of those in attendance. The Kerry coordinator beside me was beside herself. Yes, in the land of Paul "class warfare" Wellstone and Walter "I will raise your taxes" Mondale, half of the people in a college setting expressed support for cutting taxes--even for "the rich." Of course, if you're going to cut taxes in a so-called progressive system (the more you make, the more you pay, both in absolute and in percentage terms), then most of the benefit will go to "the rich."

Here's a side trip into a problem with the left: its complaint about tax cuts benefiting the wealthy, as if it was somehow a violation of everything noble, true, and good, or at least of the laws of mathematics. But if you aren't paying taxes in the first place, you're not going to get a tax cut. Simple.

Oh, the idealism of youth, so untempered by reality. One of the last questions was from a young man who asked "What's wrong with taxing and spending anyway?" One thought that came to mind: "He must not pay a lot in taxes."

IDEAS, NOT MEN
The evening was billed as a debate between left and right, and for the most part, that's what it was. It was clear that Corn was not going to be voting for Bush, and that Lowry was not going to vote for Kerry. But neither was a shill for the presidential nominees, often distancing themselves from Kerry and Bush, respectively. All in all, a good evening. (permalink)

Another case of broken windows thinking
Government spending is often justified in terms of how many widgets government offices make. It's often just another case of the broken windows theory.

I'm reminded of Bastiat's broken window theory (funny that there's another "broken windows theory" out there, but it deals with crime) as I am reviewing some state budget numbers. (Bastiat's story answers this question: if throwing a rock in a window creates more work for the glazier--in itself a good thing--why not throw rocks in all the windows one can find?)

To take just one example out of millions. The executive budget proposal for Oklahoma says that the state's $2.45 billion in Medicaid spending "is estimated to have supported 93,000 direct and indirect jobs within the health care industry and $2 billion in income." (I would link to it, but do you really want to plow through a budget proposal? I didn't think so.)

Well, yes, I suppose that could be true. Left unsaid is how many jobs that money could have supported if it was left in the hands of taxpayers. Or if the people on whose behalf the money was spent had more control over how it was spent (say, through subsidies for health insurance rather than handing money over to HMOs that serve as contractors for the state.) Or perhaps with a different financing arrangement, the same number of people could have been served by only $1.9 billion, and the balance could have been used to support X more jobs.

In short, saying that "X dollars in government spending created YZ number of jobs" is a weak rationale for a government program. It's often not the only rationale offered, but it's powerful enough to see daylight quite frequently.

Labels: Health care, Medicaid

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Health Savings Accounts: "A Slam Dunk"
Fortune magazine says that for people looking for a new way of doing health insurance, Health Savings Accounts are a slam dunk.

Established by the otherwise-awful Medicare reform bill of last year, HSAs are a permanent and improved version of Medical Savings Accounts (MSAs). MSAs, while powerful in theory, were severely hampered by the restrictions that were put on them in the game of political bargaining. (If nothing else, the evolution of the MSA to HSA shows that pilot programs, even ones created with strict limits, can contribute to bigger policy improvements down the road.)

To set up an HSA, you must also purchase a catastrophic-style health insurance policy, that is one with a deductible at least $1,000 per person, rather than the $250 or so that often goes with the many policies sold today, which effectively combine an element of prepayment with true insurance. (This mix is just one reason why health care spending, and premiums, keep going up.)

So why would you ever want to take an insurance policy with a high deductible? For one thing, it's the smart thing to do when it comes to auto and homeowners' insurance: it keeps the premiums lower. But with those forms of insurance, you do bear the responsibility of putting aside money to pay for the smaller bills.

The same logic works with HSAs and medical expenses. But keeping a high deductible on health insurance can be a lot easier than keeping a high deductible on casualty insurance. Why? If you use an HSA, you get to deposit money into an account (that's the "Account" part of Health Savings Account) to save up for those expenses that you would incur under the deductible amount.

What's so great about that? Let us count the ways.

1. The money you deposit is tax deductible--unlike money you put in a garden-variety savings account. How much money can you put in each year? With some limits, whatever your deductible is. Take a policy with a $1,000 deductible, put $1,000 into the account, on a pre-tax basis. In other words, you're getting paid to save. Don't forget, this means you are not going to pay federal income taxes, state income taxes, local income taxes, Medicare taxes, or FICA (Social Security) taxes on that money. That could be a 20-50 percent benefit right there.

2. You can invest the money until you need it, and the earnings are tax-free, unlike money you would set aside in a regular bank account.

Now, you're probably going to put it into a short-term bond fund or a money market fund--this is money you may need to pull out on short-notice, after all. So don't expect to invest it in the next Microsoft (though you could try).

3. Before HSAs, there were other ways to set aside money, pre-tax, to pay for health care expenses. One example is the "Section 125" or "Flexible Spending Accounts" that some employers offer. With those accounts, you must guess, in January, how much you will need to spend that year. If you don't spend, it, guess what happens to the money? It's gone. Lost. Vaporized. You bet it all on "Final Jeopardy," and lost. But with an HSA, it just stays in the account, ready to be used, or grow, the next year.

4. It gets even better. Remember the old IRA? You put money in, get a tax deduction, but then you have to pay taxes when you take the money out? Or the newer Roth IRA, which reverses the process? (You don't get the deduction going in, but then, you don't have to pay when you take it out.) Well, HSAs are tax-free on both ends. When you take the money out, and spend it on medical expenses (there are some restrictions; this is tax law we are talking about, after all), you still don't pay taxes. (There is a 10 percent penalty if you take money out for non-health expenses.)

Says one financial planner, "Nothing else allows you a deduction today and tax-free withdrawal tomorrow."

Now, the HSA isn't perfect. You still need to purchase the insurance policy, after all. If you depend on your employer to buy insurance for you, he gets a tax deduction for the policy, not you. (You would still be able to get the deduction for the deposit into the account, should your employer offer a qualifying insurance policy.) If you are your own employer, then you could, of course do this and write off the cost of the policy premiums, as well as the deposits to the savings account. President Bush has proposed that employees be able to deduct insurance premiums, just as businesses currently do. But that's probably not going to happen for a while. (It would "cost" the treasury too much money, and it would shake up the insurance industry.)

The Fortune article gives an example of how an HSA can work. A 47-year old man was facing a 30 percent insurance premium increase. Instead of spending $818 a month on a Blue Cross family plan, he went with a high deductible plan costing 43 percent less, or $470 a month. True, he had to then face a $4,000 family deductible. But his premium savings were even more than that amount ($4,713). Plus, again, he gets all the tax advantages mentioned above.

This is the future of health care financing. It will just take a while to get there.

Labels: Health care

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Tax Dollars (Not) At Work
If you look at your phone bill, you'll find all sorts of regulatory fees and charges. Some, allegedly, are to wire schools to the Internet. But are those dollars actually being spent?

Cast aside for now the question of why a school system that doesn't graduate anywhere from one-third to one-half of its charges should take on another task. And forget for a moment the question of where computer skills rank with, oh, teaching students how to read (something that schools aren't always great at, either.)

How about we ask a simple question: Did the money actually translate into actual computers getting into schools?

The answer, at least in Illinois, is, well, not exactly.

Here's the Chicago Sun-Times:

SPRINGFIELD -- More than $2 million in computer equipment bought by the state to help colleges, schools and local governments get online sat idle for three years, according to an audit released Tuesday.

Over three years, $341,148 was paid to store and maintain the unused network routers. But "this equipment has never been placed in service," the audit states.

As Greg Blankenship notes, "Three year old computer equipment... I'm sure the kids will get a kick out of the antiques."

You'd bet that if a similar scandal had occured in a privately run school situation (say, the school was taking students with vouchers, and everyone during a particular year got a supplemental voucher to pay for computer upgrades), you'd never hear the end of it. There wuld be a good chance that the school would never see a dime of taxpayer dollars again. But with government-run schools, it's just more of the same.

Labels: Education

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Note to Baseball Team Owners: Spend Some of Your Own Money First (Second, and Third)
Allen Barra defends George Steinbrenner, owner of the New York Yankees.

Yes, count me among the "anyone but Yankees" crowd, but Barra makes some good points. In short, Steinbrenner is accused of simply buying the best team that money can buy, while other team owners can't afford to.

Fiddlesticks (or something like that), Barra says. Carl Polhad is the owner of the Minnesota Twins. He's also a billionaire. So why doesn't he go after some of the same players that the Yankees sign?

After explaining the "luxury tax" that redistributes money from the Yankees to other teams, Barra says "One of the absurdities of the current system is that it rewards some of the wealthiest men in the country for not investing in their own baseball business."

Minnesota taxpayers ought to consider that during the annual "give us money" season during which public financing of a new stadium is discussed. (permalink)

For the Inner Word Geek
If you're always catching grammatical mistakes in the morning newspaper (or, ahem, in a blog) and wonder how the pros do it, check out The Slot, a web site for copy editors. The author is one of senior copy editors for the Washington Post. (I don't know the business that well, he may be THE copy editor.)

By the way, if you're always wondering about "affect" versus "effect" (or simply give up and use "impact"), Bryan Garner has a very readable book about English usage. It even has its entertaining moments. (permalink)

Government Growth, Private Sector Contraction
A nifty little chart from the archives of Chip Taylor suggests a sad story. (permalink)

In Praise of ATMs, Self-Service Kiosks, and Automation
Before the brouhaha over off-shoring, there was out-sourcing. And before out-sourcing, there was automation.

Fast Company, the latest business magazine to criticize business, takes a surprisingly upbeat tone in its May 2004 edition (currently inaccessible to non-subscribers.)

In "The Toll of a New Machine," Charles Fishman surveys the effects of automation across various industries.

The changes are not necessarily job-destroyers, as the doom-and-gloom crowd portrays the changes: "Instead, those jobs will change, and eventually there may be more of them, not fewer, because of self-service."

Ya don't say?

Yup. Economic efficiency at work. Seems like some guys named Ricardo or Smith or something like that wrote about this a long time ago, huh?

The effects are not necessarily predictable. Take banking, for example. ATMs are everywhere from, well, McDonalds to shopping malls to gas stations. Does this mean the death of the bank teller? Hardly. In 1985, there were 60,000 ATMs and 485,000 tellers. By 2002, when the number of ATMs had soared to 352,000 ATM, the number of tellers ... jumped to 527,000.

Here are some of the benefits of automation:

ORDER ACCURACY. Starting out with a tale of some McDonalds locations where customers order Big Macs by kiosks, we find that automation can improve accuracy--at least of fast-food orders. "We tell it the way we want it, and we know it's done right," says one customer. Or as Fishman says "McDonalds customers who use a Kinetics kiosk to place their orders have absolute confidence that the 'no onions' request has been made."

INCREASED CHOICE. Check in for an airline flight through a kiosk, and you can spend all the time you'd like reviewing the possible seat assignments. As Fishman notes, "No ticket agent has the patience to walk through this with any passenger, let alone every passenger."

INCREASED CUSTOMIZATION. Oh yes, the airline kiosks can also operate in 12 languages; how many human agents can give that kind of service?

INCREASED EMPLOYMENT (gasp!). At the McDonalds profiled in the article, volume is "up so much that they have had to add kitchen staff to make more food." True, the percentage of the store's operating costs that goes to labor have declined, but only because volume, thanks to the machines, has increased. (For some reason, people who do the self-service ordering tend to buy more. Don't tell the trial lawyers or health zealots, though.)

The shortcoming of the article is that its survey is limited pretty much to the effects of automation in airline ticketing and fast-food ordering. But the effects should be felt elsewhere.

If nothing else, though, automation could make ordering at drive-throughs easier. No more "Welcome to (static), may I take (static) order?" (permalink)

Indecency ... at C-Span?
Talk about a coarsening of the political debate. C-Span is considering putting a time delay on its call-in shows. Why? Says top exec Brian Lamb, it's the increasing use of vulgar and coarse language on the part of callers. "Most of it is contrived. They use strong words. It's just a kick for them. It's probably better than drugs." (permalink)

Adjust Other Policies, Don't Gut TABOR
Today's WSJ (link for subscribers) offers a defense of Colorado's Taxpayers Bill of Rights (TABOR).

The measure, combined with an earlier amendment, limits increases in state spending to 6 percent per year. It also limits revenue collections growth rates to inflation plus population growth; if government wants to keep more beyond that, it must seek voter approval.

Of course, the "spend more" crowd has not liked the restrictions, arguing that they threaten the state's quality of life, economy, political culture, and all manner of things

But the results have been impressive. As the Journal notes, "Between 1995 and 2000, Colorado ranked first in gross state product growth and second in personal income growth. From 1997 to 2002, it led the country in tax reduction and issued annual rebates totaling more than $3 billion."

To be sure, TABOR has not been uniformly popular, and according to the measure's advocates, the legislature has, over the years, worked to weaken its restrictions through various technical means. (One example: redefining the word "decade.")

There are indeed structural problems with Colorado's fiscal situation. TABOR's "ratchet effect" makes the measure more restrictive than may be desirable. And it also makes the establishment of a rainy day fund more politically difficult.

But it's possible to improve the state's framework by measures short of gutting TABOR, which is what a possible ballot measure would do. For starters, some of the rebates (required if tax collections exceed the TABOR limit) could be diverted into a rainy day fund. (That does lead to another set of problems: the fund's size must be "just right," not too large, and not too small, to be useful.)

As the Journal points out, a number of other states are considering TABOR-like provisions for their constitutions. While the Colorado measure can and should be adjusted to account for the constitutional framework of other states, it's a sound principle that should be adopted elsewhere. (permalink)

This Could be Arnold's Legacy
California native and political observer John Fund says that Arnold Schwarzenegger is toying with the idea of pushing for a part-time legislature.

Aside from California, Michigan, Pennsylvania, and New York have a full-time legislature. None of these four states have been shining examples of economic growth or great government, though Michigan stands above the others over the last decade when it comes to bringing some amount of fiscal and other soundness to policy. Still, the sample size (4) is so small that it's hard to definitively say that part-timers are better.

In favor of a part-time legislature: being there full-time gives folks a lot of time to come up with silly and meddlesome ideas. Among the proposals being considered in California: whether to include feng shui in state building codes. (permalink)

Word for the Day: Retronym
One of the more interesting aspects of using and studying language is the inventory of words used to describe words. And I'm not talking about "adverb" and "prepositional phrase" and things like that.

Here's one example: retronym, an example of a neologism, coined in the 1960s.

What exactly is a retronym? It may be easier to give some examples of one than to try to define it. So here it goes: conventional oven, cloth diapers, natural blond, rotary phone (are there any still out there?), snow skis. The point, of course, is that there used to be only one type of oven, diaper, ski, and so forth. (Thanks to Copy Editor newsletter for the reminder.) Turning to policy, I guess that sometime we will see "heterosexual marriage."

(Another good source of neologisms: the Word Spy web site, which documents the entry of new expressions into publication. (permalink)

Must Small Markets Practice Sports Socialism?
The defense of using the tax power of government to build sports temples? "Our market is too small to support privately-sponsored stadiums," is the Minnesota version of the argument, as summarized by television station KSTP.

But what of other cities that have recently seen new stadiums put in place with no or minimal taxpayer dollars?

St. Louis, which is a slightly smaller metropolitan area than the Twin Cities, is a more recent example of the growth in private stadium financing. The Cardinals baseball team is using its own money and that of private investors to pay $290 million of the $387.5 million stadium. That's a 75 percent private stake, the most in baseball since the Giants ballpark in 2000 was built with 95 percent of private funds.

But the Cardinals own the land around the proposed stadium and plan a massive related development. The Cardinals also possess one of the highest levels of brand loyalty in the industry. Since 1985, not counting two seasons affected by labor disputes, the Cardinals have drawn at least 2.4 million fans every year. In the same 18-year period, the Twins attracted 2.4 million fans once.

While all those things are true, they are not much of an argument for taxing Minnesota residents. The Twins lack the brand loyalty of the Cardinals? Sounds like a problem for Twins ownership and management, not taxpayers. (permalink)

The Follies of Stadium Financing
It's been said that it's hard for a politician to say no to a spending request. Come campaign time, it is easier to point to something done--look at this new road, look at that new library--than something not done. (We didn't do this or that, so your taxes will not go up.)

Perhaps the biggest example of "look what I did" projects is the stadium for the local sports team. It's a perennial issue in Minnesota, home of one of the smallest four-sports markets out there.

Study after study affirms that spending on stadiums does not produce net economic benefits; it merely rearranges money that would already be spent. The Marginal Revolution summarizes the problem:

The benefits are seen—the jobs building the stadium, the fans who spend money at the restaurants near the stadium. Unseen are the jobs lost elsewhere and the restaurants on the other side of town that lose business.

This is the "broken windows fallacy," the basis of a foundational book for anyone interested in money, the economy, or public policy, Economics in One Lesson. (permalink)

Imitation is the Sincerest Form of ... a Dull Imagination
Over the last few years, few groups have done more to nudge Minnesota away from its Scandinavian high-tax full-service government ethic than the Taxpayers League of Minnesota.

According to the Tax Foundation, a Washington, DC group, the state has the 10th heaviest state and local tax burden on a per-capita basis; its income tax collections are the 6th highest, its corporate tax rate the 4th highest, and its property taxes are "comparatively high."

Still, the $4-plus billion deficit of last year was addressed without a general tax increase. Even as former governors of his own party called for him to raise taxes, Tim Pawlenty stood fast, honoring his pledge to the League. The pledge is patterned after a document from Americans Tax Reform. In large measure, this is why the state did not follow the path of the past and raise tax rates.

Advocates of the same-old same-old don't like that, of course, and this is where the lame imitation comes in. A group calling itself the Feepayers League of Minnesota has aped the look-and-feel of the Taxpayers League site. Apparently the work of the Democratic party in the state House, it's all part of their message that fee increases (used in some measure to balance the budget in 2003) are really hidden tax increases. Of course, it is doubtful that these folks are opposed to tax increases, hidden or otherwise, mind you. Rather, it's an attempt to catch those who want hold the line on taxes as hypocrites.

Now, if more government services are funded by fees than taxes, that's fine by me, with a few caveats. One, the fee revenue should be directed to the activity for which it was allegedly collected. (No collecting fees for drivers licenses and using the money to fund museums.) Two, the fee could be enough to cover the service in question, but it shouldn't be more. (The Taxpayers League endorses this position.)

Finally, fees should be applied only to voluntary purchases. If you have to by law must purchase a government service, such as K-12 education for the children of the community, it's not a fee, it's a tax. Taxes are sometimes necessary, just don't call them fees.

Are the "Feepayers" correct that some of the fee increases are really tax increases? Given the stringent tests above, probably. No government agency is free of the temptation of playing with the numbers. On the other hand, their web site offers no details. The fact that they call tuition fee increases tax increases makes me suspect that their hand is overplayed.

Still, assume that they are correct, and some taxes have been raised in the guise of fees. Is that any comfort to the advocates of an expanding role for government? Hardly--the cat (government should be business-like whenever possible) is already out of the bag. (permalink)

It's a Spending Problem, not a Revenue Problem
Whenever governments run out of cash, it's usually blamed on a shortfall in revenue--or worse yet, a tax cut. But a look at the amount of spending reveals that idea to be false.

According to The Heritage Foundation, the federal government will spend $21,671 per household in FY 2004. Brian Riedl gives a breakdown of that spending, which is supported by taxes of $16,981 per household, and $4,690 per household. (Remember, this is simply national government spending!)

Meanwhile, median household income in the country was $42,409 in 2002 (latest numbers available from the White House).

Now, a quick comparison between $21,671 and $42,409 shows that federal spending is equal to one-half of the income of a "typical" household.

One half of one's income being spent by government? Now that sounds like a spending problem, not a revenue problem. (permalink)

State-Level Porkers
Government waste and over-reaching are not limited to the national level, of course. Inspired by the CAGW, the Oklahoma Council of Public Affairs has issued a Piglet Book. (Example: $21,000 for the Oklahoma Shakespearean Festival; $50,000 for the Friends of Oklahoma Music). Meanwhile, the Taxpayers League of Minnesota finds many excessively furnished government buildings; one of its regular features is the Taj Mahal of the week.

Meanwhile, the Mackinac Center estimates that the state of Michigan could reap up nearly $60 million simply by getting out of the business of running state fairs. (There are two.) (permalink)

It's April 15 ...
Do you know where your taxes are?

There is, of course, the group Citizens Against Government Waste, famous through the years for its "Pig Book," which gives some of the most outlandish examples of government spending.

I just noticed that CAGE has a Waste bloc that gives more of an up-to-date spotlight than the pig book ever could.

The bloc contains what you might call "duh" examples of waste, such as a federally-funded study to prove that, sure enough, excessive drinking kills brain cells. But many of the posts point to more philosophical, role-of-government questions, such as why more contractors, rather than employees, are used for construction projects, or why governments chase after professional sports teams with taxpayer dollars. (permalink)

Moral Hazard, or Why Be a Sucker?
Many public policies are riddled with the problem of moral hazard, in which people do what they ought not to do simply because someone else is picking up the tab. Perhaps the most costly case of this is Medicaid, which pays the bulk of nursing home for the aged in this country.

While the program was initially meant to help the impoverished, it's become a middle-class entitlement, a way for people who could pay for nursing home care to foist the burden off on to taxpayers. As the Center for Long Term Care Financing points out in one of its newsletters, there's a whole industry of lawyers willing and able to help middle class (and wealthy) families get their elderly parents on the dole. In effect, these lawyers help families save their inheritance by making sure that mom or dad's care is paid for not by their own savings, but by the taxpayers.

There's also a problem of collective goods at work here. Say that the John Jones family pays for nursing home care for Jones out of his savings? At around $75,000 a year, a stay in a home will put a dent in any family's hoped-for inheritance. Will it, on the other hand, do much good for taxpayers for this and that family to forego attempts to use the system? No. And one family's actions won't affect everyone else that much. But add them up, and you've got a health care system that approaches the Pentagon in terms of spending heft.

There is insurance that one may buy to cover long-term care. It's expensive--perhaps too much so for most people. That's one reason why Medicaid scams are so popular. But the easy availability of Medicaid financing for nursing home care undercuts the market for LTC insurance, leaving us trapped in a vicious circle.

Labels: Health care, Medicaid

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When Politics Gets Depressing
Here's one reason why I prefer to deal with policy (finding possible solutions to problems) rather than politics (getting so-and-so into office): the political debate can get over the top.

During the Clinton years, the fevered swamp of Republican partisans accused the president of running a drug smuggling operation out of Arkansas, and of conspiracy to murder a key White House aide.

Now during the Bush administration, we have an "unelected president" who is being compared, by some severe critics, to Hitler, complete with doctored photographs.

Instapundit points us to a lifelong Democrat who laments The Degeneration of the Republican Party. He writes that "The party whose ideals once excited me has become a parody of itself, a dangerous parody." Another snippet: "Bush-Hate, racism, calls for the death of Republican cabinet members, snide innuendo, joy at the death of Americans in Iraq, the endless political thumbsucking of the 911 Commission, and there's more on the way, much more."

Click through to see Colin Powell get the latest "Uncle Tom" treatment. (permalink)

Slippery Slopes Threaten Free Speech
Slippery slope arguments are sometimes fallacious. But at other times, merely, and sadly, predictive.

The Volokh Conspiracy notes that it may soon be illegal for orthodox Christians to cite the Bible in discussing the morality of homosexuality.

Says blogger David Bernstein: "Fifteen years ago, when I was in law school, supporters of hate speech rules argued that there were no slippery slopes, that Holocaust deniers' and pornographers speech could be restricted without damaging the First Amendment. In Canada, they started making exceptions to their constitutional guarantee of freedom of speech just fifteen years ago. Those cases involved Holocaust deniers and pornographers, and now it's illegal to quote biblical condemnations of homosexual acts. No slippery slopes, indeed." (permalink)

Victimhood as a Guide to Foreign Policy
In today's Wall Street Journal, Dorothy Rabinowitz takes on the fallacy that investigations into 9/11 are all about satisfying the families of those who died in the attacks (or more specifically, satisfying a small group called the "Jersey Girls.")

"The venerable status accorded this group of widows," she writes, "comes as no surprise given our times, an age quick to confer both celebrity and authority on those who have suffered."

One journalist, she said, summarized up a recent day of 9/11 hearings this way: "The issue of real significance that day, he explained, would be how the families of the 9/11 victims reacted to her testimony."

Her response was as "insensitive" as it was correct: "Really? How can that be?--is the only reasonable response to that claim, which would not have been made in a saner time. How could it be that the most important issue emerging from an inquiry into undeniable intelligence failures, at a time of utmost national peril, was the way the victims' families reacted to the hearings?"

More important, for starters, is the question of how to respond to terrorist plans to inflict similar damage in the future. (permalink)

The Trouble with Public Schools
One argument often made against increased school choice is that privately operated schools are not accountable, and are subject to all sorts of fraud, waste, and abuse. But there's plenty of evidence that government stewardship is no better--and is worse in many instances.

A few years ago, the Wisconsin Public Research Institute offered Horror Stories from Public Schools (here in PDF)

Among the findings: 3,000 school employees in Georgia with criminal records. A school bus driver in Pennsylvania with 21 driving-related citations. Teachers union officials in Illinois fend off a requirement that teachers undergo background checks.

And perhaps the most remarkable case of teachers gone bad is this math question posed in Texas: Johnny has an AK-47 with an 80-round clip. If he misses six out of ten shots and shoots 13 times at each drive-by shooting, how many drive-by shootings can he attempt before he has to reload?

Talk about a story problem.

Labels: Education, School choice

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High-Tax States: Not Who You Think
So what are the highest taxed states? California? New York? Minnesota? According to a new report from the Tax Foundation, it's not who you think.

The foundation has a variety of easily-pulled data sets addressing state (and federal) taxes. One of my favorite is the set that looks at the burden of state and local taxes as a percentage of personal income.

Sure enough, New York is #1, taking nearly 13 percent of personal income. But Minnesota (the home of Walter "I'm going to raise your taxes" Mondale) ranks "only" #10, thanks in part to the steadfast opposition of the first-term governor, Tim Pawlenty. California is all the way down at 26.

Who else is in the top 10? In the category of "Fallen Republicans," Ohio is #3, Wisconsin is #6, and Utah is #7. In Ohio and Utah, Republicans run the show, and have for a while. Wisconsin, meanwhile, was governed Tommy Thompson (a Republican) for over a decade, before he became President Bush's secretary for Health and Human Services.

"Reliable Democratic states" may be the label to apply to Hawaii (#4), Rhode Island (#5), and Connecticut (#9). Also in that group: West Virginia (#8). But the biggest surprise is who is not #2: not California, not Connecticut, not Massachusetts (#36), but Maine.

Another interesting fact: aside from population-spare and oil-rich Alaska (call it America's frozen OPEC), the total burden of federal, state, and local taxes was at least 25 percent of income in every state.

It's sometimes alleged that high-taxes and high-incomes go hand-in-hand. Say, high taxes lead to well-funded schools, which turn out to be good schools, which produce productive and thus well-paid employees.

It's hard to make that case by taking a casual look at these listings. Low-income West Virginia (per capita income in 1999: $16,477) and Connecticut (per capita income in 1999: $28,766) have a state and local tax burden of 10.6 percent.

So much for taxation as an engine of economic growth. (permalink)

Happy Tax Freedom Day, America: You're Now Working for Yourself
Yesterday was not only Easter Sunday (a day of significance beyond this blog's usual scope); it was also Tax Freedom Day(®)

What's that mean? Every year since at least 1963, the Tax Foundation has calculated the day after which the average American will be working for himself. This day is, as the foundation says, "the day when Americans will finally have earned enough money to pay off their total tax bill for the year. Every dollar that’s officially called income by the government is counted, and every payment to the government that is officially considered a tax is counted. Taxes at all levels of government are included, whether levied by Uncle Sam or state and local governments."

It's a stunning way of thinking about the tax burden--one whole calendar quarter (and more!) devoted to paying for taxes. Of course, there's more to the cost of government than taxes, and that includes regulations, which are computed by various other groups. (permalink)

Off-Shoring Numbers Inflated
Figures lie, liars figure, and statistics cause trouble for us all. The latest instance: just how extensive is "off-shoring," or the loss of white collar jobs from the U.S. to other countries.

IDC, a Massachusetts-based company, projected that "23 percent of all white-collar tech jobs will be filled offshore by 2007," says the Wall Street Journal. But now a spokesman for IDC says that the report was "a little wobbly" in its methodology. Meanwhile, Forrester Research Inc. (another Massachusetts company) said that 3.3 million jobs would be gone by 2015. But the Journal says that the number was "an educated guess." The chief Forrester employee who came up with the number now says that the number has been hyped in the media, which "makes me a little mad." I'm not sure this means he thinks the number is wrong. At the least, it sounds like he thinks the number is being given more credence than it is worth.

While the world is a messy place, and policy makers must deal with uncertain data all the time, both politicians and journalists peddle fear (in this case, "all our jobs--ahem, YOUR job--is going to India") to sell votes and attract people to newspapers or television shows.

As the rest of the article illustrates, though, there are several reasons why "fear factor" statistics can be wrong. "Between 2000 and 2003, employment in the U.S. among computer programmers, as defined by the Bureau of Labor Statistics, fell 182,000 to 563,000. The number of airline reservation agents fell 35,000 to 179,000." Both sectors have seen some outsourcing, but have had their own shocks as well--the popping of the tech bubble and the shift to online reservations systems. (permalink)

The Literary Class and Socialized Medicine
There are many reasons why we haven't made more progress towards bringing economic rationality and market power to health care. Over the last week, I've been reminded of what may be one of those reasons: it's the literary class.

What prompts me to say this? An e-mail exchange I have been having with members of a professional association of freelance writers and editors. After one person ranted about the cost of her health insurance premiums, the discussion has turned into one after another cry for socialized medicine.

We need the Canadian system, said one writer. Another favored France. If support for socialized medicine makes me a communist, said a third, so be it. (These are my recollections, not exact quotes.) I've made a spirited defense, but it's hard to start from square one, and I am getting (thus far) no public support.

Now, I know that it's easy for writers (and many others) to over-estimate their importance: "I'm going to change the world!" But there is something to the notion of the Italian communist, Antonio Gramsci. Here's the dimestore version of one of his key thoughts: "Historically, different intellectuals have created the ideologies that have moulded societies; each class creates one or more groups of intellectuals. Thus, if the working class wants to succeed in becoming hegemonic, it must also create its own intellectuals to develop a new ideology."

Pick up a copy of most magazines in the popular press -- Time, Business Week, Women's Day, Consumer Reports, the New York Times, the syndicated news stories carried in your local paper, what have you -- and most of the time, any treatment of health care policy will emphasize more government regulation of insurance, expansion of government programs such as Medicaid, the weakness of market-based approaches, and a criticism of any new proposals to bring competition and consumer responsibility (with its attendant benefits) to the field of health care.

Is there something about earning a living as a writer that prompts people to think this way? Perhaps. For one thing, many are self-employed freelancers. They look at employees of large corporations, and see generous benefits and low premiums (if they exist at all). By contrast, the small business owner has had a more difficult lot. They want better--and see a move towards socialized medicine as the solution.

There is no necessary reason for this situation to exist. The current tax code, among other structures in the policy environment, have brought us to this point. (For more information, see the Galen Institute for its page on the Consensus Group, which outlines a way out of our current mess.)

Change is hard, and there are certainly ideological and business interests that impede policy reform in this direction. Add to that list, the frustrations of a small but important profession trapped by current policy.

Labels: Health care, Medicaid

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Tax Limitations Are Not a Threat to Democracy
I address one particular criticism of tax and spending measures such as TABOR in this op-ed published in yesterday's Minneapolis Star-Tribune.

TABOR is criticized on many fronts: it deprives the state of money needed for important programs, it is not needed, it precludes the ability of the state to save for a rainy day, and so forth. There's only so much you can address in a single, short article, so I focused on what seems to be a major point in the land that prides itself on Good Government: TABOR is a simpleton's way to avoid the hard and necessary work of careful deliberation in legislative chambers. (permalink)

At Wal-Mart, Low Prices Produce Job Gains
One argument against Wal-Mart, endorsed by at least one business magazine, is that the company is leading the country down the path of financial ruin; sure, we may get low prices, but those depend on low wages, and soon we will all be working for $5 a day.

Another excerpt from City Journal addresses this argument:

A Wal-Mart-sponsored study, undertaken by the Los Angeles County Economic Development Corporation, estimates that Wal-Mart’s entry into the local market would save county shoppers about $1.78 billion annually and southern California shoppers $3.76 billion annually, or nearly $600 per household. Shoppers would redirect those savings, the LAEDC says, into other uses that could create up to 36,000 new jobs, more than offsetting the estimated loss of 3,000 to 5,000 jobs resulting from a drop in the grocery-industry wage pool.

OK, so the study was "sponsored" by Wal-Mart, which may count as a strike against it. But basic economics supports the study's conclusion: if you don't spend money at X, you are likely to spend it at Y, which will require workers of its own. (permalink)

Wal-Mart Takes On Unions
Among the strongest critics of Wal-Mart: unions of grocery story workers. Again, from the City Journal article by Steven Malanga:

It is these grocery departments that are at the heart of the battle. They represent a grave new threat to unionized food stores. Though unions have been unable to organize the discount industry—Wal-Mart competitors like Target and Kohl’s are also nonunion—they have been much more successful in supermarket chains, so when Wal-Mart began pulverizing the grocery competition with its low prices and vast selection, it threatened union gains.

[snip]

Wal-Mart’s entry into a market can still drive down grocery prices 15 percent, and as a result the $250 billion company has already become the country’s largest grocer, with a fifth of the market. Some analysts predict that it could eventually capture 35 percent of grocery sales in the U.S.—a staggering achievement. (permalink)

Why Wal-Mart Matters
Wal-Mart has been the subject of intellectual scorn and a variety of legal battles. In some situations, when the company has been in partnership with local governments to abuse eminent domain, criticism has been justified. But mostly the criticism has been a mishmash of economic self-interest (on the part of other merchants as well as unions, frustrated in their attempts to organize store employees), NIMBYism, a romantic vision of city life as a collection of small-time artisans, and perhaps a touch of snobbery.

And from City Journal:

This new war on Wal-Mart is more than just a skirmish over store sites or union-organizing efforts. It is an attack on a company that embodies the dynamic, productivity-driven, customer-oriented U.S. economy that emerged in the 1990s by opponents who advocate a different economics. Arguing that there is a hidden cost to business’s increasing emphasis on low prices and high employee output, these opponents seek government edicts to force Wal-Mart and discounters like it to raise wages and offer workers more benefits. Wal-Mart’s opponents are rushing into battle just as the company and some of its imitators are expanding their brand of retailing to many underserved urban communities starved for the low prices, broad selection, and friendly service these stores offer, making the conflict a vital issue not just in Wal-Mart’s traditional rural and suburban markets but, increasingly, in American cities. (permalink)

A Fool's Expert
Better keep to writing about policy rather than sports? I filled out the brackets at Yahoo sports for March madness and competed against approximately 800,000 entries (!) for nothing more than bragging rights. My finish? In, uhm, 226,000th place. That places me in the 72nd percentile, meaning I outperformed roughly 574,000 entries.

Considering that I could not recognize a trap defense or pick-and-roll if asked to, that's not so bad. At one time I was in the 95th percentile, having gotten 3 of the final 4 right. But when my picks for the final (Oklahoma State, Duke) were defeated, that was the end of my run. (permalink)

The Cost of Drug Development
How expensive is it to develop a new drug? The National Center for Policy Analysis offers this summary of an article, "Fixing the Drug Pipeline" in The Economist. (The Economist requires a subscription.)

• The process takes about 15 years.


• It costs upwards of $900 million dollars.


• Only one in 1,000 compounds makes it to human trials.


• Only one-in-five ultimately become a drug.

The NCPA does note some outside criticism of drug companies, namely, that they are concentrating their efforts on finding the next blockbuster drug. But is it any wonder? The regulatory process takes so long that taking a blockbuster approach may be dictated simply because it brings some economies of scale when it comes to dealing with the difficulties of lab experiments, clinical trials, and government review. (permalink)

Another Governor for Illegal Drugs and Economic Nonsense
New Hampshire's governor, Craig Benson, is the latest top politician to tap into economic folly. The state now has a web site to facilitate the purchase of prescription drugs from Canada, a practice illegal under FDA rules.

Benson announced that it would be "irresponsible" to avoid this "common-sense solution."

The Boston Globe reports that Benson used a bit of cloak-and-dagger work to get this done, first asking for federal permission to set up the site, and then proceeding to do so clandestinely. He also purchased some drugs on the Net through Canadian pharmacies, to test the process himself.

Borrowing tired rhetoric usually associated with opponents of tax cuts, Benson declared that pharmaceutical companies have "balanced their books on the backs of seniors for too long."

FDA officials say that eventually they may ask a federal judge to stop the practice, citing safety concerns. (Why haven't they done so already?)

The FDA, arguably, needs fundamental reform, and the safety threat, though real, is perhaps overplayed. Even 100 percent purer-then-snow prescription drugs from Canada are in the long run unsafe, but for an entirely different reason than expired products or bogus ingredients.

Importing drugs from Canada merely encourages that country's practice of price controls. Econ 101 anyone? Lower prices, less supply (and in a research-driven business, fewer new drug breakthroughs). In the case of prescription drugs, less supply could mean more sickness, and more death. Now that's a safety concern. (permalink)

Are Gas Prices Too High?
The average price of a gallon of gasoline is now $1.73. Too much? Not by historical standards, argue Jerry Taylor and Peter Van Doren. In today's dollars, gas cost $1.66 a gallon in 1955, "the most celebrated days of cheap fuel and gas-guzzling cars."

Further, they say in this WSJ essay (paid subscription), we've seen far worse. In today's dollars, the record price was $2.36 a gallon, set in 1981.

Compared with inflation-adjusted GDP, gasoline is actually cheaper. While incomes have doubled since 1972, for example, the price of gasoline has gone up only 35 percent. (permalink)

ADMIN: Mailing List Available
If you'd like to receive e-mail notification of updates to this publication, see the note in the left-hand column, or click here.

The messages will contain the text of each entry as it is published, or on a digest (daily) basis. (permalink)

Michigan Union to Vote, Again, on Pay Package
How strong are unions in Michigan? Strong enough that they represent employees in state government. Strong enough that they influence budget negotiations.

Governor Jennifer Granholm and the legislature crafted a budget last year that depended on some concessions from state employee unions. Most of the unions have agreed, but there are still some holdouts, the Lansing State Journal reports.

Under the proposal, employees work 40 hours but get paid for 38. That sounds like a 5 percent pay cut, which is not great. But it's better than what some employees in the private sector have been through, and it's better than losing your job--which is what may happen to some employees if the union rejects the idea for a third time. (And truth be told, the money isn't entirely lost for employees--they can get it put into their retirement accounts when they leave state employment.) (permalink)

KidCare, the Back Door to a National Health Service?
The Christian Science Monitor reports that S-CHIP, Medicaid for children, is largely being spared from budget-cutting rounds in state capitols.

"Last year, the number of children enrolled in SCHIP went up 7 percent, a rate far slower than in past years. Still, that brought the total number of children covered to more than 5 million, at least during some period of the year."

Some states have raised co-payments, and others have capped enrollment. There are five million children in S-CHIP programs, and the number could soar 80 percent if all who were eligible were actively signed up.

Now, criticism of S-CHIP is like criticism of healthy children, which ranks at or near the top of sacrosanct policy goals. Still, the questions remains of how to achieve that goal. At least the Monitor does bring in a quote from Nina Owcharenko, an analyst at The Heritage Foundation, who favors efforts to make greater use of the private insurance market over another government-run program. (Too bad, though, that state regulators have done so much to damage that alternative.)

In an old yet still relevant essay (PDF), John Hood says that for many children, being uninsured is a state that lasts only a short time. He also warns that the number of uninsured is overstated. Laying the problem of uninsurance on unaffordability brought on by the tax code and regulations, he calls for states to eliminate the mandates that drive up insurance costs, and for refundable tax credits (state, federal, or both) for the purchase of insurance in the private market.

Labels: Health care, Medicaid

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New York Local Pols Blast State Over Medicaid Tax
Former New York City mayor Ed Koch has joined forces with two other pols to create "Fix Albany," a group dedicated "to amend state laws that force part of rising Medicaid costs onto localities, a burden that critics say drives up property taxes. Most other states do not require local governments to share Medicaid costs."

The big-time entitlement programs--Social Security, Medicare, and Medicaid--are going to have to be injected with a healthy dose of competition and reform lest they consume budgets everywhere. Of the three, only Medicaid extensively relies on state funding, as opposed to federal funding. (The amount ranges from one quarter to one half, with the burden higher in wealthier states such as New York.)

I have always had the impression that New York is one of those states that has done the most in the "letting Medicaid get out of control" department. If the tab for the program is carried in part in local property taxes, that's one of the reasons. When one group of politicians can make the decisions about spending but shove the responsibility for raising the taxes to pay for that spending to another group, the true costs are obscured and accountability is weakened.

Labels: Medicaid

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