Tuesday, December 02, 2003

The values of the middle class under threat. Posted here Tuesday, December 02, 2003 at 2:54:26 PM     and from the preceding This excerpt from the introduction to the libertarian Cato Institute's Handbook for Congress in the 1990s is typical: The "bourgeois virtues" of work, thrift, sobriety, prudence, fidelity, self-reliance, and a concern for one's reputation developed and endured in part because they are the virtues necessary for survival and progress in a world where wealth must be produced and people are responsible for their own flourishing. Government can't do much to instill these virtues in people, but it can do much to undermine them. Comment: the rational would work except that the "bourgeoisie" which now means salaried employees, are working harder for less inn a squeeze between technology and third world competition. As the B values cease to work to support families, and increasing approach a non-rewarding treadmill existence, the work ethic will come apart. In much of our history people held on because the middle class was expanding, and middle class status was increasingly rewarding.     and The protective blanket of the welfare state has become widely perceived as smothering the vigorous virtues—initiative, diligence, commitment, fair play, and enthusiasm —in the name of charity, patience, kindness, and sympathy. From increasing the age of retirement to narrowing the criteria of disability, from tax credits for the working poor to competitive bidding on social service contracts, the norms and values that frame the design of social welfare policies for the enabling state, in all its renditions, tend to celebrate economic productivity and private responsibility over social protection and public aid comment: if the middle class were a constant percentage of the whole, or increasing, this might work. But what happens when it is shrinking, when instead of one chair per round of musical chairs two are taken out of the game?  The virtue argument is too limtied, avoids the reality of who suffers, and is made to order to maintain the flow of cash to the already much better off. Also, the programs described, support through corporations, is already away of taking cash tax from everybody and feeding it in to the corporate sector, thereby supporting larger organizations. and But Gilbert admits that he may be overstating the case. Direct social spending in such countries as Germany, Sweden, Italy, the Netherlands, and Denmark remains around 30 percent of GDP, compared to only 17 percent of GDP in the US.[4] Even in Britain, it is about 10 percent higher than in the US. comment: yet the pressure is on every country to cut these numbers to stay competitive. Given that employment is also falling, among older and the youngest workers, we can expect the armies of the unemployed become a nudge towards armies of war. Note the need for critical thinking to able to move at least three steps, else it is just mouthing static opinions. Change and secondary consequnces are crucial to understand. and But as the economists Marilyn Moon and Cristina Boccuti point out in a study for the Urban Institute, spending by private insurers per person has risen 20 percent faster than spending by Medicare since 1970. In a market as complex as health care, with information both scarce and hard to decipher for the average consumer, some regulation and standardization is often useful. ..But the experiment, as Gilbert points out, also took place in a strong job market. Moreover, a large proportion of those who left the welfare rolls still live at or near official poverty levels. In short, welfare reform needs itself to be reformed, as Amitai Etzioni writes in a foreword to Gilbert's book, because it has gone too far: Throwing mental patients, alcoholics, mothers with small children, or anyone else onto the streets and cutting off their benefits is not compatible with treating all people as ends in themselves. Note the idea that eating people as ends is still viable language. But does it carry any weight? For those who take a tougher view, the discipine is wrth it in creating a life, which is a form of treating people as ends, not just as recipients, but as producers. The circle of cause is in fact not easy. Tax deductions for corporate pension and health care benefits alone result in lost federal tax revenues of $200 billion a year. But only about 16 percent of workers with earnings in the bottom quintile of the nation—the lowest 20 percent—receive pension benefits, and only 24 percent receive health benefits. By contrast, some 50 percent of workers in the third quintile receive pension benefits and 60 percent health benefits. In the top quintile, roughly 70 percent of workers receive pension and health benefits. In a decreasingly active economy, with more aged, and less middle class, rethinking this problem is critical. The solution may require totaly new approaches. Otherwise we will see a larger part of the population suffereing more deeply over time. ********

Cost of drugs as percentage of budget for the benefit of...? Posted here Tuesday, December 02, 2003 at 2:41:05 PM     from the previous article on health care Out-of-pocket costs are expected to rise from $644 a year in 2000 to $1,454 in 2006. Even with $400 billion, the new legislation will reimburse only about one third of the beneficiaries' total out-of-pocket drug costs,[1] and the program will not even begin until 2006. The current bill will also make it possible to impose a limit on future increases in Medicare expenditures and create tax-free savings plans for individuals to pay for private services. If we think of each person having a budget, in part from personal funds and in part from the government, then we see that the percentage that could go for drugs could rise. There is no principled basis for limiting the increase of that percentage, which means other costs must go down (talking in percentages). This is a general problem of limitless goods driven by technical research and amrketing with the aim of taking a larger proportion of the total budget as profit in one's own sector. But there are a number of sectors that want to impoase this logic. What to do? How to manage it? It clearly is not a"market" but a government subsidized market, taking tax dollars from al and putting them into high profit margin uses for the apparent benefit of the  medicare patients but realy fueling the drug companies. ********