Thursday , March 4 2021
Home / S. Sumner: Money Illusion / We did much worse than Obamacare

We did much worse than Obamacare

Summary:
Tyler Cowen has a post on various topics. This caught my eye: Perhaps two things I was right about, but still not recognized as correct are: 1) post-2012 or so (but not earlier), unemployment was fundamentally a re-matching problem, and would not have been helped much by nominal decisions by the Fed, and 2) we could have done much better than Obamacare and no I don’t mean single payer. Obviously I disagree about the post-2012 period, but I’d like to focus on Obamacare. Tyler’s right that we could have done much better, but he doesn’t mention that we’ve actually done much worse. But wait, didn’t we end up with Obamacare? In fact, the most valuable part of Obamacare was the so-called “Cadillac tax” on health insurance, which would have gradually phased out the

Topics:
Scott Sumner considers the following as important:

This could be interesting, too:

Tyler Cowen writes Sins of omission vs sins of commission

Tyler Cowen writes Wednesday assorted links

Tyler Cowen writes Ola Malm on the future and industrial organization of chess

Tyler Cowen writes Causes of the sex drought

Tyler Cowen has a post on various topics. This caught my eye:

Perhaps two things I was right about, but still not recognized as correct are: 1) post-2012 or so (but not earlier), unemployment was fundamentally a re-matching problem, and would not have been helped much by nominal decisions by the Fed, and 2) we could have done much better than Obamacare and no I don’t mean single payer.

Obviously I disagree about the post-2012 period, but I’d like to focus on Obamacare. Tyler’s right that we could have done much better, but he doesn’t mention that we’ve actually done much worse. But wait, didn’t we end up with Obamacare?

In fact, the most valuable part of Obamacare was the so-called “Cadillac tax” on health insurance, which would have gradually phased out the massive tax subsidy to health care, perhaps the most important single factor driving up costs and driving down living standards for working class Americans. It was phased out during the Trump administration, perhaps his single most destructive policy decision.

I recall that this Obamacare provision was touted by Democratic policy wonks as a huge gain in efficiency, and they were right. So why does hardly anyone even talk about the fact that we’ve ended up with a much worse system than Obamacare?

The answer is simple. We are now polarized into two tribes—Democrats and Republicans. Both tribes conspired to screw the public in order to bail out the bloated health care industry, and thus neither tribe wants to talk about this shameful act.

Don’t let the media tell you what the important issues are. The important issues are not cancel culture, GameStop, or even monetary policy. They are 400,000 in prison for drug crimes, 40,000 needless deaths from kidney shortages, US support for mass murder in Yemen, and lots of other stuff you hardly even see mentioned on twitter.

PS. People wonder what I mean by utilitarianism. Ponder this quote:

Speaking to KDTVWashington County Republican Party chair Dave Ball said: “We did not send him there to vote his conscience. We did not send him there to do the right thing, whatever he said he was doing. We sent him there to represent us, and we feel very strongly that he did not represent us.”

Yes, there are people who don’t care about maximizing aggregate welfare. They care about maximizing aggregate GOP welfare.

PPS. Make that GOP male welfare.


Tags:

 
 
 
Scott Sumner
Scott B. Sumner is Research Fellow at the Independent Institute, the Director of the Program on Monetary Policy at the Mercatus Center at George Mason University and an economist who teaches at Bentley University in Waltham, Massachusetts. His economics blog, The Money Illusion, popularized the idea of nominal GDP targeting, which says that the Fed should target nominal GDP—i.e., real GDP growth plus the rate of inflation—to better "induce the correct level of business investment".

Leave a Reply

Your email address will not be published. Required fields are marked *