By Luke Brinker
In his latest Newsweek column, Niall Ferguson extols billionaire PayPal founder and prominent libertarian Peter Thiel as “one of the most interesting and original thinkers in America today.”
Like most libertarians, Thiel’s opposition to big government comes with a “but” appended to it. In Thiel’s case, he supports massive government investment in research and development, which has significantly benefited tech entrepreneurs like Thiel himself. This particular line — which calls Ferguson’s praise for Thiel’s great mind into question — is particularly noteworthy:
However, when it comes to questions about health care, nuclear power, and education, Thiel readily concedes that government has a role to play—just not the one it plays today. As he puts it: “If Einstein sent a letter to the White House today, it would get lost in the mailroom and be treated as a joke. In the late 1960s, Kennedy focused on the space program and didn’t dedicate money to health care. Can you imagine the government doing that today?”
Set aside the fact that JFK was dead in 1963, so he didn’t do anything related to space “in the late 1960s.” What’s most appalling about Thiel’s remark is his suggestion that the 35th president emphasized space at the expense of health care. In fact, JFK pushed for the Medicare program that his vice president and successor, Lyndon Johnson, signed into law in 1965. (Faced with a more conservative Congress than Johnson dealt with, JFK had had difficulty passing much of his domestic program.) As this clip from one a 1962 speech at Madison Square Garden demonstrates, JFK was an impassioned advocate for universal health care:
With all that praise for Europe’s advances in the field of health, the JFK of Madison Square Garden would surely be labelled a radical Marxist by the Tea Party. Perhaps that’s why the right loathed Kennedy when he was in the Oval Office.
By Luke Brinker
The controversy surrounding Politifact’s ridiculous selection for its “Lie of the Year” illuminates the intellectual bankruptcy of the mainstream media’s cult of balance.
According to Politifact’s high priests of truth, Democratic claims that Rep. Paul Ryan’s Medicare plan would “end Medicare as we know it” are egregious distortions of reality. But under the Ryan plan, Medicare would cease to exist as a public insurance program in 2022. Given that Medicare has been a single-payer program since its creation in 1965, any objective observer would conclude that such a proposal would indeed end Medicare “as we know it.” Alas, while Politifact promotes itself as a defender of plain facts, regardless of partisanship or ideology, it betrays its allegiance to Peter G. Peterson Foundation-style deficit hawkery, as Jonathan Chait notes:
oes the Republican plan indeed end Medicare? I would argue yes. But it’s obviously a question of interpretation, not fact. And the whole problem with Politifact’s “Lie of the Year” is that it doesn’t grasp this distinction. Politifact doesn’t even seem to understand the criteria for judging whether a claim is a question of opinion or a question of fact, let alone whether it is true. The item explaining this year’s choice largely consists of irrelevant filler. For instance, Politifact quotes a worried budget scold:
“In terms of creating a national conversation about fiscal reform, the last thing we need is demagoguing attacks against people who have put forward serious policy proposals,” said Jason Peuquet, a policy analyst with the bipartisan Committee for a Responsible Federal Budget. “It’s very worrying.”
Yes, if your agenda is to encourage politicians to propose deficit reduction, then you’ll be worried about any criticism of any deficit reduction proposal, accurate or otherwise. So what? (Matthew Yglesias further parses Politifact’s incredibly weak explanation.)
Of course, deficit alarmists are Very Serious People committed to the future of the republic, and we aren’t supposed to point out that their social program-slashing agenda is, at its core, an ideological proposition. The problem is that the Ryan plan would do nothing to rein in health costs, which drive long-term deficits. As Politifact asserts, something called “Medicare” would still exist under the Ryan plan. However, it wouldn’t be Medicare as it’s existed for nearly half a century and would instead give seniors vouchers with which to purchase private health insurance plans. Health care expert and physician Ezekiel Emanuel, who knows a thing or two about these issues, points out that the Ryan plan shifts costs, but doesn’t reduce them:
Premium support is classic cost shifting, rather than cost cutting. Unless growth in health care costs is low, Medicare beneficiaries will just have to pick up the difference between the voucher’s value and the cost of the health insurance plan they purchase. In fact, the original Ryan plan would have increased out-of-pocket costs for older people by more than $6,000 in 2022. And we can’t depend on competition to bring costs down. Competition among insurance companies in general has not lowered them — in fact, from 1970 through 2009, Medicare spending per beneficiary grew at a slower rate than that of private health insurance.
Many premium support plans contain a spending cap meant to check the growth of Medicare. But whether this works depends upon a very technical — but essential — point: How fast will the amount of the premium support grow? Will it grow with inflation? With gross domestic product? With overall health care spending? When they say the “devil is in the details” this is what they mean. Under the Rivlin-Domenici plan, the value of the voucher would be capped at the rate of overall economic growth plus one percentage point — less than health care inflation has historically been. The Wyden-Ryan plan replaces the voucher cap with an overall cap on Medicare spending using the same target. Excess spending would prompt cuts to doctors and other providers, or an increase in payments by wealthier Medicare beneficiaries.
Moreover, as Paul Krugman demonstrates, Medicare is far superior to private insurance when it comes to reining in costs:
The idea of Medicare as a money-saving program may seem hard to grasp. After all, hasn’t Medicare spending risen dramatically over time? Yes, it has: adjusting for overall inflation, Medicare spending per beneficiary rose more than 400 percent from 1969 to 2009.
But inflation-adjusted premiums on private health insurance rose more than 700 percent over the same period. So while it’s true that Medicare has done an inadequate job of controlling costs, the private sector has done much worse. And if we deny Medicare to 65- and 66-year-olds, we’ll be forcing them to get private insurance — if they can — that will cost much more than it would have cost to provide the same coverage through Medicare.
By the way, we have direct evidence about the higher costs of private insurance via the Medicare Advantage program, which allows Medicare beneficiaries to get their coverage through the private sector. This was supposed to save money; in fact, the program costs taxpayers substantially more per beneficiary than traditional Medicare.
Facts, as John Adams said, are stubborn things. Ironically, they seem to be Politifact’s biggest enemy today.