And They're Off! The Democratic Candidates for 2020

[drogulus]

Granted, English is not my mother tongue but what I infer from the above is "the economy will pay more tax on higher income". If you could explain me how "economy" can "pay tax", be it more or less, I'll retract "nonsense". (That is, putting aside the issue of writing "more tax" for what I assume you meant "higher taxes".)

     Ah, you are approaching the portals of sense. Let me help you get all the way though. Let's call everyone who pays federal tax the "economy", even though not everyone does pay tax, at the aggregate level (the level that concerns us) all taxes are paid, no taxes are paid by not the economy. If it pays taxes, it's the economy. So long as all the tax is on the economy it doesn't matter that some pay zero or even negative tax.

     Put it all together and the economy is taxed. That takes care of the first unintelligible point.

     The second unintelligible point is how the tax return changes as the economy changes, typically when the economy grows. First what should you expect to happen, in English or any language? Given the same tax rates the nominal tax will grow. Over the last decade the U.S. economy grew about 50% in nominal GDP, while the annual tax return is up by about 60% unadjusted, so we're comparing apples to apples.

     So, holding rates constant and not trying to target a tax/GDP ratio (who does that?), your task is to estimate what the effects will be of a Medicare for All plan both on the private costs side and the public costs side, as well as the demand effects of the shift in terms of employment.

     There is every reason to assume that I'm not (yet) talking about changing tax rates.

[Todd]

no taxes are paid by not the economy

Only on GMG.  Literally.

[drogulus]

     

Well, then it just seems to be a matter of which poison tastes worse to Americans, which can be decided by voting...

     I'm insured either way they vote. My interest is that it's efficient costwise to cover everyone and the economy will run better that way. Emergency rooms are the most costly way to deliver health care, and sicker patients cost more, too. Covering everyone means more preventive care and earlier interventions when people get sick.

     I'll pay less for my coverage if I carry lower external system costs, and so will everyone similarly insured, which optimally will be everyone.

[Florestan]

     Ah, you are approaching the portals of sense. Let me help you get all the way though. Let's call everyone who pays federal tax the "economy", even though not everyone does pay tax, at the aggregate level (the level that concerns us) all taxes are paid, no taxes are paid by not the economy. If it pays taxes, it's the economy.

That's not even heterodox economics anymore, it's Humpty-Dumpty economics.

"When I use a word,' Humpty Dumpty said in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less.'

[Todd]

That's not even heterodox economics anymore, it's Humpty-Dumpty economics.

Including the word "economics" is extraordinarily generous of you. 

[drogulus]

That's not even heterodox economics anymore, it's Humpty-Dumpty economics.

     It's neither, it's this:

     

     What you're missing is that absent ideology there are facts, such as the federal tax rate on the economy.

     As the economy grows the tax total stays within a range. Rate changes have a small impact.

     If you change rates the economy will still be taxed in the range above. This chart goes back to 1945. Spot the rate changes, spot the "largest increase/decrease in history".

     Don't bother, you have no idea. Changes in the tax regime can be distinguished by their effects on the rate of growth in the economy. A large economy that is taxed at 16% sends more tax back than a smaller one.

[Todd]

Yep, definitely argle-bargle.

[drogulus]

That's not even heterodox economics anymore, it's Humpty-Dumpty economics.

"When I use a word,' Humpty Dumpty said in rather a scornful tone, 'it means just what I choose it to mean — neither more nor less.'

     This might help.

     Taxes for Revenue Are Obsolete

     What's now called MMT used to be called chartalism. Keynes operated within the gold standard and some of his successors kept the framework. Trying to combine a money scarcity theory with its refutation leads to all kinds of mischief. It's why most economists can't explain why they are wrong repeatedly in ways they can't seem to correct.

     Randall Wray wanted to call MMT neochartalism. That would have been good since it's not a new theory. I note that Wray wants to abolish corporate taxation on the same grounds as Ruml did. That's tangential to the point but since I like it, it's in here. It's the same kind of howyougonnapayfor BS as Medicare for All. Where will we "get" the money?

     Warren threaded the needle between sense and nonsense sufficiently well to satisfy nonsense afficianados as well as the practical minded. Krugman blessed her effort, so there's that.

[Todd]

Looks like drogulus writes foofaraw as well.  A double threat.

[71 dB]

So Warren came out with her version of M4A. It's good to know Warren seems to after all wishy washiness endorse M4A, but her plan is problematic. She tries to formulate it so that it "doesn't rise middle class taxes", but that's semantics to avoid bogus corporate critisism. Of course middle class taxes go up because you need to PAY FOR IT. Of course for the middle class it's money saved, when they get rid of private taxes, premiums etc. According to Kyle Kulinski Warren's plan is harder to pass than Bernie's plan and it's clear Bernie would fight harder for M4A as he has fought these things for decades rather than jumping the M4A bandwagon now that is a winning issue politically.

Bernie is still the best, Warren being second best as Democratic candidate.

[drogulus]

So Warren came out with her version of M4A. It's good to know Warren seems to after all wishy washiness endorse M4A, but her plan is problematic. She tries to formulate it so that it "doesn't rise middle class taxes", but that's semantics to avoid bogus corporate critisism. Of course middle class taxes go up because you need to PAY FOR IT. Of course for the middle class it's money saved, when they get rid of private taxes, premiums etc. According to Kyle Kulinski Warren's plan is harder to pass than Bernie's plan and it's clear Bernie would fight harder for M4A as he has fought these things for decades rather than jumping the M4A bandwagon now that is a winning issue politically.

Bernie is still the best, Warren being second best as Democratic candidate.

     An article said the Warren plan is criticized by the left, right and center. That's tells me that a real world economic analysis of how costs shift, rise and fall has nothing to do with what people are saying.

     They might as well all hire a single economist and tell him/her/it "run out of dollars here" "no, run out of dollars there" "whatever you do, just run out of dollars".

[schnittkease]

Warren's head tax charges middle and low earners much more than a payroll tax does. $9.5k is a lot more to workers earning $15k than to those earning $190k; 8% is the same for everyone.

[71 dB]

Warren's head tax charges middle and low earners much more than a payroll tax does. $9.5k is a lot more to workers earning $15k than to those earning $190k; 8% is the same for everyone.

Yes, that's Warren's trick to be able to say middle class taxes don't rise.

[drogulus]

Warren's head tax charges middle and low earners much more than a payroll tax does. $9.5k is a lot more to workers earning $15k than to those earning $190k; 8% is the same for everyone.

     It's easily fixed to look like something we'd want to do. Medicare for All is in any case a resource question and not about how many dollars are needed for it. All plans based on money run outs are equally repugnant. We always produce the money for anything resources allow us to do, if we really want to do it. Deciding to do a big program is deciding on not running out of dollars for the resources we use dollars to deploy. This is what we always do, and always will do. Whenever an emergency happens we immediately stop the bogus dollar run outs and do what works until the worst of the danger passes and it's safe to go back to our stupid ideas again.

[JBS]

Yes, that's Warren's trick to be able to say middle class taxes don't rise.

She also tries to force a considerable amount of the costs onto employers and states by mandating them to pay as much on health care for employees and Medicaid recipients. An important part of the mess we are in now comes from employers and states trying to get out of paying those benefits in the first place.  But even if it works it just means state taxes will go up and employee benefits will go down...so we taxpayers will still be stuck with the bill.

[drogulus]

She also tries to force a considerable amount of the costs onto employers and states by mandating them to pay as much on health care for employees and Medicaid recipients. An important part of the mess we are in now comes from employers and states trying to get out of paying those benefits in the first place.  But even if it works it just means state taxes will go up and employee benefits will go down...so we taxpayers will still be stuck with the bill.

     Putting the burden on employers and rising employee premiums is exactly the wrong thing to do. That's what we're trying to get away from. It should be in the fiscal balance and nowhere else. That's the lowest cost, lowest overhead way to do it. You could even raise a little tax to calm the nervous nellies, though by far the best thing is to see how much the economy will balance on its own, then you can let the taxophiles have a little fun.

[milk]

I don't understand anything about macro-economics. I really think a lot of people are like me in that we don't understand what medicare-for-all means for working class people in terms of all the details and repercussions. My friends on the socialist left, who hate democrats really, support Sanders as a matter of ideology. My only belief regarding this issue is that it should be and is possible to find a way to have everyone covered and no one in debt for being sick. I live in Japan; It's not the best system but everyone is covered. Maybe the U.S. needs something like Japan where big companies have one big system and independent/temporary workers another. Here, everyone MUST join and costs are fairly low.

I'm losing a little trust in Warren because it seems like she's promised something that's full of holes and she's boxed herself in. It's too bad because despite her faults, I think she has political talent and real knowledge about banking and consumer protection. She's made some flubs but I still think she's a decent human being.

I quite dislike Biden though I think Dems need another look at a mainstream candidate. It's too bad Cory Booker got no traction. He's another talented politician and a genuinely good guy.

I don't want a prosecutor - Harris or Klobuchar - because I have a low opinion of that profession and both of them rub me the wrong way.

I really don't know anything much about Buttigieg and no idea if he could really contend nationally. Could he? Should he?

Who's left? Who do we have? I'm starting to get a bit pessimistic.

[71 dB]

She also tries to force a considerable amount of the costs onto employers and states by mandating them to pay as much on health care for employees and Medicaid recipients. An important part of the mess we are in now comes from employers and states trying to get out of paying those benefits in the first place.  But even if it works it just means state taxes will go up and employee benefits will go down...so we taxpayers will still be stuck with the bill.

In the end someone has to pay for healthcare so costs must be forced to someone. To whom are costs forced on is a political choice of what kind of country the US is. Is it an oligarchy where healthcare is NOT a human right, but something the rich can profit on, or is it a social democracy where healthcare is a human right meaning those who have more money need to pay a larger share of the healthcare costs? This democratic primary is a test of what kind of country Americans want. If they want to keep the oligarchy, someone like Joe Biden or Pete Buttigieg will be the nominee. They won't do much to change the system so oligarchy can continue. If people want democracy, Bernie Sanders or Elizabeth Warren* will be the nominee. If americans fail to elect Bernie Sanders or Elizabeth Warren* as the next president then Americans simply want oligarchy and they better be fine with what it means: 30.000-45.000 dies every year because they don't have access to basic healthcare, half a million people go bankrupt every years because of medical bills, the most expensive dugs in the World etc. That's the cost of insurance company/Big Pharma CEOs buying more yachts.

* Electing Warren means slim chance for M4A, but I don't blame people if they think Warren gives then single-payer-healthcare. Most people don't follow politics intensively and the misinformation of the corporate media doesn't help. We can only hope enough people realize Bernie Sanders is the correct choice, the best bet for having M4A and other much needed changes.

[71 dB]

I don't understand anything about macro-economics.

The important thing is to understand that in macro-economic systems money doesn't dissappear when it's used. When you buy a car, from your perspective the money is "gone" forever, but in macro-economic systems money just circulates and never disappears. This is an oversimplification, but it's the main principle when dealing with macro-economics. In macro-economics the flow of money and how money flows are important things. Flow means activity. It means people have jobs and can consume. Depression is less flow. How money flows is also important. Do people use money on alcohol or education? Money used on eduction is more beneficial to the society while wild alcohol usage creates problems. Macro-economic system has multiplying effects: Using 1 dollar on alcohol may have a multiplying effect of 0.8 meaning 20 cents is gone from the system (the problems ate it up) while using 1 dollar on education may have a multiplying effect of 6 in the long run so that over the years 5 dollars are added to the system (education made it possible to be more productive).

macro-economic is totally differen from business economics. In business you minimaze the costs and maximaze the income as the main principle, but in macro-economics you want a steady good flow of money through the things of large multiplying effects. Since social problems means inavoidably poor multiplying effects, good macro-economics almost automatically means good social policy and this is one of the secrets behind the success of for example Nordic countries.

I really think a lot of people are like me in that we don't understand what medicare-for-all means for working class people in terms of all the details and repercussions.

It means you pay less for better care. You pay less, because you no long pay for the new yachts of insurance company/Big Pharma CEOs and the richest 5 % pay more, their "fair share", because of their increase in taxes is bigger than what they save not paying premiums etc. private taxes.

My friends on the socialist left, who hate democrats really, support Sanders as a matter of ideology. My only belief regarding this issue is that it should be and is possible to find a way to have everyone covered and no one in debt for being sick. I live in Japan; It's not the best system but everyone is covered. Maybe the U.S. needs something like Japan where big companies have one big system and independent/temporary workers another. Here, everyone MUST join and costs are fairly low.

I don't know your friends, but they are probably social democrats rather than socialists. Ask them if they think the US government should own Apple. If they say yes, they are socialists (outside capitalistic ideology). If they say no they are social democrats (inside capitalistic ideology) Bernie Sanders is a social democrat (but he calls himself democratic socialist which is unfortunate and wrong).

Other developped western countries have found a way to have everyone covered and no one in debt for being sick. It's done by having a single-payer-system and removing profit incentives from healthcare. It turns out that people don't go bankrupt for being sick when they don't have to pay for new yachts for CEOs and single-payer-system ensures a good risk pool so that the costs are distributed evenly among people. That's real healthcare insurance. If 1 % of people need treatment X, then everybody pays 1 % (on average, in practice the rich pay more and poor people less if anything) of the cost of such treatment and we are done. Nobody is in debt for being sick, but also no new yachts for anyone! In fact it means LESS yachts, because the rich have to pay more taxes! It's about deciding which is more important in society: All people have affordable healthcare or CEOs have many yachts. Call me a socialist, but somehow I think people having healthcare is 100000 times more important. 

I'm losing a little trust in Warren because it seems like she's promised something that's full of holes and she's boxed herself in. It's too bad because despite her faults, I think she has political talent and real knowledge about banking and consumer protection. She's made some flubs but I still think she's a decent human being.

Warren is probably the best candidate on banking and consumer protection, but she has her weaknesses such as voting for wars. Of the candidates she is clearly second best choice after Bernie now that Tulsi Gabbard has disappointingly backpedaled from M4A (Tulsi is the best when it comes to getting out of wars).

I think Dems need another look at a mainstream candidate.

It's not 90's anymore. The time of (corporate) mainstream candidates is over. Mainstream candidate Hillary Clinton lost to (fake) populist clown candidate Trump. The US has moved to the era of political populism. That's why 2 out of 3 candidates of the top 3 are populists and only one is (corporate) mainstream and is hanging up in the polls thanks to "default" support from people who don't follow politics closely and have nostalgic memories of the Obama years when mean Tweets were not a thing. People want candidates who say things they want are possible, not candidates who say things are not possible. Why would you vote for a candidate who says he/she is against the things you want/need? You want healthcare? I am against that! You want "free" education? I am against that! You want 15 dollars living wage? I am against that! My corporate donors don't like what you want so shut the fuck up and just vote for me! The Overton Window is moving left and soon people like Bernie Sanders are considered "mainstream." In Finland Bernie Sanders would be totally mainstream, close to the political center.

[Karl Henning]

I don't understand anything about macro-economics. I really think a lot of people are like me in that we don't understand what medicare-for-all means for working class people in terms of all the details and repercussions. My friends on the socialist left, who hate democrats really, support Sanders as a matter of ideology. My only belief regarding this issue is that it should be and is possible to find a way to have everyone covered and no one in debt for being sick. I live in Japan; It's not the best system but everyone is covered. Maybe the U.S. needs something like Japan where big companies have one big system and independent/temporary workers another. Here, everyone MUST join and costs are fairly low.

I'm losing a little trust in Warren because it seems like she's promised something that's full of holes and she's boxed herself in. It's too bad because despite her faults, I think she has political talent and real knowledge about banking and consumer protection. She's made some flubs but I still think she's a decent human being.

I quite dislike Biden though I think Dems need another look at a mainstream candidate. It's too bad Cory Booker got no traction. He's another talented politician and a genuinely good guy.

I don't want a prosecutor - Harris or Klobuchar - because I have a low opinion of that profession and both of them rub me the wrong way.

I really don't know anything much about Buttigieg and no idea if he could really contend nationally. Could he? Should he?

Who's left? Who do we have? I'm starting to get a bit pessimistic.

Your pessimism is justified.

My present thoughts are that, while there is ample reason to prefer someone else, Biden may possibly be the best nominee. We all know from for years ago that "I'm not Trump!" Ain't enough.