Real Numbers

Real Numbers

08/8/2022

    Here's a quick (and uncharacteristically brief) follow up on a recent blog page entry regarding the fallacy that a single payer (let’s call it Medicare for all, since that already exists for over 65s) would make hospitals and other facilities fail since "Medicare only pays 90% of the actual charges.”  This quote, in similar form, has come from various sources, all with the commonality that they oppose a single payer system and will shamelessly skew and, in many cases invent “data” to prove it. I thought I had wrapped up all I need to say on this topic, but then I received a letter from Tricare in the afternoon mail. The recent debt ceiling kerfuffle with the attendant Medicare shaming and blaming reminded me of this entry which is germane.     

         Understand (for you civilians) that one of the benefits of being a retired military careerist is that for the retiree and his or her spouse, at age 65 a program called “Tricare for life” becomes a secondary insurer. No, this isn’t “free medical insurance.” Like all Americans at age 65, Medicare becomes the primary insurer, and either Medicare or some form of “Medicare Advantage” plan is the initial payee. Tricare simply covers what might be a co-pay for non-retirees. It is a beautiful thing, true, but all military retirees are still required to pay Medicare part B, exactly like civilian retirees. Tricare sends me a notice every time either Emily or I have a medical bill which is covered by Medicare. It is simply a notice that Medicare paid (whatever) and they (Tricare) paid the rest, if any. 

        Yeah, so what? So, lets return to the fallacious statement that “Medicare only pays 90% of the set fee while other insurance pays the full price.” 

        Yesterday’s notice (not a “bill” since I paid nothing) was for “one eye” of my wife’s cataract surgery (a resounding success!). Now here’s the interesting part.

“Amount billed: $1,500”

Understand this, if nothing else. The only time, if ever, that the facility receives the “billed” amount would be if someone with no insurance and lots of money elected to have this procedure in the facility. A wild guess at how often this occurs for this and other elective procedures would be in the general vicinity of “never.” 

“Other insurance paid: $713”

 This “other” insurance isn’t Medicare, but United Healthcare, a private Medicare Advantage plan. The reasons why we don’t use just Medicare are not germane to this discussion. The “take-away” here is that if Medicare had paid the “90%” which the erroneous claim alludes to, then the provider would have received $1350! In other words, the private payer only paid 47% of the billed fee.

“Tricare allowed: $895” This is exactly the same as what Medicare “allows.”  Understand this: Medicare's  allowable cost share was, in fact, 21% greater  than that paid by the Medicare Advantage carrier

“Tricare paid $181.92”

 Cost share/copay: 0 (That's the good part!)

Read that again. Counter to claims that Medicare is shortchanging providers at 90%, United Healthcare has negotiated a far lower cost share. This is so low that Tricare chipped in an additional $182, bringing the actual percentage of the billed fee actually paid to only 60% of the nominal fee. There was no “cost share” for us. 

So, tell me again how private insurers are “paying more than Medicare?”        

RCI Explained

                 Did You Ever Wonder?

04/30/2023

Why the mothers in the various paper towel commercials never lose it and go postal on the careless urchin.....

 NCIS LA - how the US Navy ever commissioned a 4 ft 10-inch dwarf and placed her in charge of anything

Q-tips, warning labels in general: “Do not insert swab into ear canal. Entering the ear canal could cause injury.” OMG who would do that? (90% of users!)

Why people will believe things they want to believe on little or no evidence, and refuse things they ought to believe with lots of proof.

Why those who seem most likely to espouse the WWJD ideal rarely ever act as Jesus probably would have.

What mental process occurs to make one simultaneously pro-life and pro capital punishment.

New Explanation!

Recto-Cranial Inversion - An old naval term for the condition in which one's head is so far up one's kiester that they can read the newspaper through their navel. It is widely believed that that persons with this condition lose their ability to reason, make sound judgments and think critically. Of course, one may wonder, "How would I know if this (RCI) has happened to me?  What follows, all due homage to Jeff Foxworthy, is a sampling of indicators that you might have undergone an RCI.

1) If you believe Marjorie Taylor Green should have stayed married so she could have more children .... you may have had an RCI.

2) If you honestly believe any of the "Real Housewives of (your town here)" are real housewives..... you may have had an undetected RCI

3) If you believe that any person who physically resembles Linda Hunt runs any para-military unit on the planet ..... you had an RCI. 

4) If you believe that an abused child is better off with their abusive parent(s) or in foster care than with a committed gay couple who want to adopt them....... you have had an RCI (and your name is Santorum)

5)  If you really believe that Twitter is "really important" because we all really need to know when Justin Bieber gets a haircut.....you have suffered an RCI.

6)  If you can't get through a complete English sentence (y'know, subject, predicate, etc) without saying
"like" seven times in totally inappropriate context........ you have suffered an RCI

7) If you believe Matt Gaetz has important life lessons to teach all of us............

8) If you think OJ Simpson was innocent and that Kim Kardashian should be flattered that he claimed to have fathered her...............RCI

9. If you think televangelists are really doing it to serve God, and not for the money.........RCI

10. If your dog has coordinated costumes for most major holidays....................... RCI

11. If you pay to valet park and bitch about the price of gasoline............. RCI

12.   If you smoke because "Well, you gotta die of somethin'” …………definite RCI

13. If you don't believe the warning on a box of q-tips ("never stick them in your ear") is the most ignored warning label in the world.......you've had an RCI

14. If you dress and paint your 6-year-old like a hooker and enter her in pageants because "She just loves them"...... you have a crowded colon.

15. If you really think that we have been visited by aliens who, by sheer coincidence, always happen to land in trailer parks in Arkansas ...........RCI.

16.  If you really believe "right to work" laws protect workers............ RCI

17. If you define and/or limit yourself for life based on something (good or bad) that happened 15 years ago....... you have lived with an RCI, and wasted a lot of living!

18. If you believe Bill's BJ was worse than Trump’s rapes, .............major RCI

19.  If you think the "student" part of the term: "student Athlete" really applies to most NCAA division I basketball or football players .............you have had an RCI

20.  If you think just being here is all the justification you need to expect society to support you without some effort on your part............your head is in a very dark place indeed.

Star Parker, Still Writing, Still Wrong

 

          Star Parker, Still Writing, Still Wrong

05/25/2023

In today’s column, Star Parker, ever the apologist for right wing madness, excoriates the Democratic Party for the current debt ceiling crisis. She also of course, phrases it in such a manner as to imply that the Republican Party is relatively blameless for the size of the current deficit. She does this by simply ignoring the three record deficits of the Trump administration. Of course, she also ignores the fact that one of the drivers of the size of the current deficit is the Trump tax reduction which is costing more money than it generates.

I have previously written page after page on the economics involved and the fiction inherent in the Republican mantra that cutting taxes increases the economy elsewhere. This has been proven false time after time after time as tax decreases have been followed by reduced federal revenue and obviously an increase in the federal deficit.

Of course, we also hear the Republicans griping about what they call “entitlements” such as Medicare Medicaid and Social Security. If you listen to the Republicans you might almost believe that we are increasing Social Security spending simply as a budget item and therefore spending more on Social Security. Statistically, it is obvious why the Social Security share of the federal budget is increasing. More people, by which I mean the baby boomers, are living longer, resulting in the fact that far fewer people are paying into Social Security than are drawing out of it and that number is increasing as the boomers reach seniority. As unpleasant as it may sound, the fact is that the baby boomer generation will eventually move through the system and on to whatever reward they have elsewhere and a lower number of people as a percentage of population will be drawing Social Security. This is guaranteed because of the almost 50% decrease in the birth rate that followed the end of the baby boom generation.

 I have written at length elsewhere about one measure that should have been taken to avoid this crisis. The fix, which should have been applied about 1950, (when it became obvious that average life expectancy had already increased by seven years from 1936) would have been to increase the age for full Social Security retirement by one year every decade for three or four decades (“grandfathering” those in the ten-year clade before the first bump occurred) and reduce the amount of early SS paid to those who take it while increasing the year of early eligibility several years.  Had that been done, we would not have the current issue with Social Security spending that we do, because a significantly lower number of people would enter the system in any given year. However, that ship has sailed and the best we can do is wait it out. That said, considering the more than 17 year current longer lifespan from 1936, when most Americans didn’t even live long enough to be eligible, until the current year, it still might be appropriate to bump up the eligibility age by a couple of years over two decades. What worked in 1936 doesn’t work today simply because we live much longer and can work a couple of years longer also.   

While we’re speaking of average life expectancy, here are two additional significant and sobering pieces of data:            

1) Life expectancy in the U.S. fell by 2.7 years from 2019 to 2021, whereas in peer countries, life expectancies fell by an average of only 0.2 years in this period. In other words, COVID-19 erased two decades of life expectancy growth in the U.S., whereas the average life expectancy for comparable countries has decreased only marginally, to 2018 levels.

2) The US, which we are frequently told by various officials has the “Finest health care system in the world” spends more and provides less than any equivalent economy in the world. Trust me, multiple international studies verify this statement. 

One way to address this, (the “cost” side of the issue) which I have ranted about on many occasions, is to simply re-legislate Medicare Part D to allow Medicare and Medicaid to negotiate drug prices. Many major U.S. pharma companies at present are showing net annual profits in the range of 25 to 30% which is five to six times average corporate profit in the United States.

        While they complain that allowing the negotiation of drugs and their pricing by Medicare and Medicaid would reduce the money they have available for research and development, the truth is they already spend more on advertising than on research and development and about 3/4 of the drugs newly approved by the FDA on the annual basis are the result of basic research funded by the National Institutes of health. I mentioned this only because such a step would reduce Medicare drug spending by hundreds of billions of dollars annually and yet the deficit Hawks of the Right don't want to address this simply because each member of Congress receives about half a million dollars in drug industry lobbying annually.  In 2020, US health care lobbying expenditures totaled $713.6 million! Also, collectively, Pharma companies spent $6.88 billion on direct-to-consumer advertising in 2021. By the way, only New Zealand and the US even allow that sort of advertising.

Reducing Medicare drug spending is a commonsense issue and Big Pharma fights it like hell, even though they bend and spread for every commercial insurer in the US. Your Medicare Advantage Plan and every other health insurer in the US negotiates drug prices, why not Medicare?

All the above is aimed at reducing spending, but the larger issue is Federal revenue. The bigger and more frustrating issue, which Miss Parker completely ignores, is the simple fact that if you spend more you need to collect more. We are at what amounts to an all-time low in income tax rates, yet the same people who scream about taxes are the people screaming about the debt ceiling. The frustrating part is that those whose lifestyle will be least affected by increased taxes are those who scream loudest. It is equally puzzling when a moron like Marjorie Taylor Green opposes tax increases although she is so far from the category of people that would really feel any effects from it that it is simply a contradiction in terms. It is doubtful that more than three people in Marjorie Taylor Green’s Congressional District are high enough earners that they would even feel a tax increase on those that earn more than $400,000 a year which is one of the proposals in terms of where the marginal rate increase might kick in. Additionally, we collect almost a trillion dollars less annually than what is legitimately owed, yet the Congress balks at the hiring of more IRS agents as current employees retire, citing the Left’s intention of “weaponizing” of the IRS.

        In short, (yes, I know, too late) those on the right side of the aisle are prepared to go to the wall to protect the perks and privileges of those who already have far more than they need, and they're willing to do it at the expense of people who are essentially economically defenseless. We speak derisively of the Russian Oligarchs, while our Congress protects our homegrown versions. Meanwhile, underinformed talking heads like Star Parker point the accusatory finger at the current administration while ignoring the sins of previous administrations.

Economically we simply need to come to grips with the fact that trickle-down economics doesn't work and that tax reductions do not increase federal revenue, as has been proven by Reagan, Bush 43 and by Trump. How many more times must we be slapped in the face with reality before we acknowledge it? 

 

Florida Man

 

                 Florida Man, A Brief Respite

In the lamentable absence of anything to really feel good about in the current political environment, I have decided to take a look at one of our state’s nationally known phenomena. That would, of course, be the legendary “Florida Man.”

Florida Man is somewhat of an enigma. He is probably a mouth breather, with the permanent indentation of a snuff can in the frayed fabric of his left rear dirty jeans pocket. He revels in the breeze that goes through his hair and front two-tooth gap while doing donuts on his ATV. His is the spiritual specter watching expectantly whenever someone says, "Hey, hold my beer and watch this shit!" He is Florida, and Florida is him. He is not to be construed as your average male resident of Florida: Florida Man is his, and in some cases, her, own brand.

 The phrase itself has gone into the urban dictionary as just meaning exactly what we think it means - a male resident of the state of Florida who has done something so incredibly stupid and, in many cases even self-destructive, that it becomes nationally newsworthy. Sometimes Florida Man is apparently gender fluid, because, as I implied above, the occasional female will step up with equally inane exhibitions of the genre.

Some of the very worst and darkest of these are even team efforts, such as the father and daughter who, upon seeing a raccoon trapped in a dumpster, decided to throw it an apple loaded with bleach and then burn it alive. This is simply deranged and cruel criminal activity and these people should be disemboweled with rusty salad tongs and left to be devoured by rabid gerbils. Period.

On the other hand, the Florida Man (or persons) of truly legendary status are individuals who are obviously several sandwiches short of a full picnic and whose belts (if any) don't go through all the loops. In some cases, I may just post the headline (In bold italics) which is pretty much self-explanatory, and I may or may not amplify on the case. I don't know yet, so here goes.

“Florida Man Arrested for Calling 911 After His Cat was Denied Entry into Strip Club” At the risk of offending, when did it become illegal to find p***y in a strip club? I sorta thought that was the whole idea, but then I’m not a patron of such entertainments, so I may be wrong.  

“Florida Man Banned from Airline for Wearing a Thong as a Face Mask Compares Himself To Rosa Parks”
In December of last year, a Florida Man who was banned from an airline for wearing a thong as a required mask and refusing to use a real one offered to him, actually had the gall to compare himself to Civil Rights icon, Rosa Parks. Really?

“Florida Man Arrested for Directing Traffic While Also Urinating” (?) It is what it is.

“Florida Man Claims Bags of Cocaine and Meth Wrapped Around His Penis Aren’t His” That same December of 2021, another Son of the Sunshine State, upon being searched at Orlando International airport, attempted to convince authorities that the bags of Cocaine and Meth found wrapped around his penis were, in fact, “not his.” Much to his chagrin, they didn’t believe him.

“Florida Man Punches CVS Employee While Shouting F**k Joe Biden” Several weeks ago, a Florida Man entered a Gainesville CVS store and, for no apparent reason, assaulted a female employee who was getting ice cream from a freezer. After grabbing her and punching her several times in the face, while shouting “Fuck Joe Biden” (??) he was tackled by a customer, who he also punched, and then fled the store. He was later arrested. (This charge will look nice on the wall beside his previous felony conviction for battery on a law enforcement officer.)

“Florida Woman Opera Singer Who Used Powerful Soprano to Scream “F**K” and “C**T” During Capitol Riot Arrested Today By FBI.”  And on a similar note: “Florida Man Arrested for Breaking Into U.S. Capitol, Says He Was “Only There To Use the Bathroom.”

“Florida Man Denies Syringes Found in Rectum Are His” A Pinellas County man said three syringes removed from his rectum during a jail strip search weren’t his, according to an arrest report. Arrested earlier in Pinellas County on an outstanding drug possession warrant, he continued that he had “no idea how they got there.” The mind reels.

 

 

“Miami Lawyer Whose Pants Caught Fire in Court Charged with Cocaine Possession.”  This same Florida Man made headlines four years earlier while defending a client who was accused of setting his car on fire for insurance money. During the March 2017 trial, he was defending his client by claiming that the incident was a result of spontaneous combustion, when his own pants caught fire (liar liar?), apparently attempting to prove that it could happen. When accused of chicanery, he then claimed the fire had coincidentally been ignited during his defense by the battery from his e-cigarette. This prior action didn’t favorably affect the current cocaine charge.

“Florida Man Learns Hard Way He Stole Laxatives, Not Opioids” This poor schlub broke into a house in Pinellas Cunty and stole what he believed to be hydrocodone tablets. The bottle actually contained Equate laxatives meant for “gentle, dependable overnight relief." The thief was caught on video breaking into a “lock box” at the victim’s home and was seen pouring the alleged "opioids" into his hands. He is back in jail.

 “Florida Man Stole Truck, Attempted to Break into Military Base to Warn of Fight Between Aliens and Dragons” (oohkay!) He (an Ocala resident) was driving a truck that he had stolen several days before his failed break-in at Patrick Space Force Base. Following the inevitable arrest and restraint, Police say he shared that, "The President of the United States told him in his head that he needed to take the vehicle." They were unimpressed.

“‘All Hail Donald Trump': Florida Man Goes Berserk Following Hit-and-run Crash on His Wedding Day.” The newlywed individual in question struck a vehicle while driving the wrong way on one way street in Vero Beach. He fled on foot but was arrested a short distance away and police immediately suspected he was under the influence of an unknown substance. He was arraigned and began yelling “All hail Donald Trump” at the jail. He miserably failed field sobriety tests, although his blood alcohol registered 0.0%. Police asked him to provide a urine sample to test for drugs but, he then took off his pants, spread his buttocks and stuck two fingers into his anus. We don’t know (and don’t want to know) what ensued.

Florida Man Sets Apartment Complex on Fire After Manager Told Him to Stop Masturbating in Front of Windows. This Tampa man was probably a “Proud Boy” huh?

And finally (mercifully?)

 Florida Man offers police officer $3 and chicken dinner for sex. A female investigator was undercover and posed as a street level prostitute. During the operation police said one of the suspects, our Florida guy, offered to trade $3 and a chicken dinner for a blow job. There is no mention of what aspect offended the officer the most - the crime or the paltry offer.

Be proud, Floridians. They walk among us!

An Historical Oddity

 

                                 An Historical Oddity

05/04/2023

Note: This is really far afield from my usual political rant, but the current continuing dirge of right-wing drivel has left me numb this week. I wrote this wearing my history professor shirt, and I’m pretty sure this will take the reader’s mind far, far, away from our current political morass. And now:

There is an exclusively volcanic archipelago in the South Pacific east of New Guinea and southeast of the Solomon Islands. This island group as a whole, an independent Republic since 1980, is the nation of Vanuatu. One of those islands is Tanna, and several of its villages share an extremely unusual characteristic.

To understand what goes on, one first needs to understand the concept of the cargo cult. The myths of the cargo cult have their roots as far back as the very earliest myths that a European Christian, known as Prester John, actually ministered to people in South-East Asia. Some of the earliest accounts even allege that it was the apostle John. Of course, they never saw him, because the most reliable accounts have John spending his days on the Island of Patmos, with some having him living in Ephesus (Turkey) at the time of his death. The history of Prester John is the history of a man who never existed. Medieval legend recalled him into being when it was felt that his presence would be of help in the struggle between Christian Europe and the Islamic world.

        Over time, this morphed, in some indigenous and generally isolated groups, into the idea that there was this semi-divine individual named John who would, at some point in the future, come back and bring good things to these isolated communities. In later years, one of the names given to this “person” was John Frum. The “John Frum” of the people of Tanna may have been either a British or French or even American sailor who at some point came in contact with these people. He is sometimes even depicted as an American World War II serviceman who will bring wealth and prosperity to the people if they follow him. British Naturalist, David Attenborough reported an encounter with locals during which he was told, "'E look like you. 'E got white face. 'E tall man. 'E live 'long South America."

Either way the cargo cults, which still exist on a few other Pacific Islands, as well as among several tribes of New Guinea, believe that somebody, usually regarded as a semi-divinity, will come from the West, bringing technologically advanced goods to these people - hence the word “cargo.”

        What makes the two cargo cult villages on Tanna, (Yaohnanen and Yakel) unique is that they have actually identified a real person as that semi-divine individual. He has only been there once, and, being now deceased, never will be again.    According to ancient Yaohnanen tales, the son of a mountain spirit travelled over the volcanic mountains to them. He was sometimes said to be a brother to “John Frum”.

The people of the Yaohnanen and Takel area believe in the divinity of the recently deceased Prince Philip, Duke of Edinburgh, the late Prince Consort to the late Queen Elizabeth II. The Yaohnanen tribe believed him to be the pale-skinned son of an ancient mountain spirit. They had seen the respect accorded to Queen Elizabeth II by the colonial officials and concluded that her husband, Prince Philip, must be the son referred to in their legends. The origins of this belief are not known or at least openly discussed by believers, but ancient tales tell of the mountain spirit’s son travelling to a distant land, marrying a powerful lady and, in time, returning.

It gained real time traction in the 1950s or 1960s and was further strengthened by the royal couple's official visit to Vanuatu in 1974, when a few villagers had the opportunity to actually see Prince Philip from a distance. At the time, Vanuatu was still a British dependency as part of the New Hebrides.  The prince was not then aware of the sect, but it was brought to his attention several years later by a British Resident Commissioner in the New Hebrides.

In April 2021, the sect mourned Prince Philip's death. The Village Chief said that he was "terribly, terribly sorry" that the prince died and the tribal leader sent his formal condolences to the Royal Family and the people of the UK. A formal mourning period was declared, and many tribespeople gathered in a ceremony to remember the duke, where men took turns to speak and pay tribute to him. For the next few weeks, villagers met periodically to conduct rites for him. Referring to the Queen, Chief Jack Malia said that though the Duke is dead, they still “Have a connection with the 'mother' of the royal family.” Many of the tribesmen believe that while his body lies at rest, the duke’s soul will return to "its spiritual home, the island of Tanna. There are those who believe (hope) that the Mountain Prince spirit will transfer to the duke’s son, Prince Charles”. (Don’t hold your breath.)

I have seen nothing related to how the death of Queen Elizabeth has affected these communities.

The Speech No One Wants To Give (update)

 

The Speech No One Wants to Give

 

“To attain any success, it is quite clear that the Federal government cannot avoid or escape responsibilities which the mass of the people firmly believe should be undertaken by it. The political processes of our country are such that if a rule of reason is not applied in this effort, we will lose everything — even to a possible and drastic change in the Constitution. This is what I mean by my constant insistence upon “moderation” in government.

        Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things…. a few other Texas oil millionaires, and an occasional politician or businessman from other areas. Their number is negligible, and they are stupid.”

        Sound a bit like AOC speaking?  Perhaps a Socialist candidate? Hardly. This is an excerpt from a letter written by Republican Dwight D. Eisenhower, then POTUS, to his brother Edgar. The gap is where he named several names of those he considered “stupid.” The second paragraph reveals how far the modern Republican party has strayed from Ike’s precepts, having become markedly anti-union, and progressive labor legislation, and threatening Social Security. Of course, since many modern Republicans reap the windfall from farm subsidies, they have actually increased (read RED states).

        However, the title of this essay reflects my belief that we should consider and honor the scientific process, by which I mean mathematics, statistics, and demographics. One of the aspects of science which some political conservatives and an even greater percentage of conservative religionists deny, is that as conditions change (read climate change, here, as one example) so should our expectations and actions.

        One such Conservative objection to some change is the fear that doing the right thing isn’t the “right thing’ if it affects business’s bottom line. Another thread is voiced by those who are stuck with a creation “story” which is increasingly revealed as creation “myth” by science. The tragedy here is that as we are seeing as I write, the right salesman with the proper snake oil can, seemingly against all odds, unite these seemingly disparate forces.  

        First off we have the claims that Congress is “pilfering" the Social Security Trust Fund.  This has become the lie that won't die, simply because too many are willing accept it without doing the simple homework to verify its fallacy. 

    Social Security sometimes collects more money than what is paid out. Between 1937-2009 the Social Security Administration (SSA) received $13.8 trillion in income, but expended $11.3 trillion in benefits, according to the agency. However, for the past 11 years, the retirement program has taken in enough FICA taxes to pay current year benefits and that's where the Trust Fund, comes into play.

    Every year, excess money is held in the "Social Security Trust Fund" which gets invested into Treasury bonds and securities that make a lot of interest. In the Fiscal Year 2018 those investments racked up $3 billion alone, adding to a total of $2.895 trillion currently in the fund. So any money taken in from Social Security isn't being divvied up among Congress, that money is being invested in the most secure way--with U.S. bonds.

"No, [Congress] did not take any funds from SS," Dean Baker, senior economist at Center for Economic and Policy Research, said. "SS funds are credited to its trust fund. Unless Congress changes the law (and it hasn't), any money dedicated to the trust fund is in the trust fund.”

        Having said that, it must be noted that one consistent bugaboo, addressed with varying amounts of arm waving and hot air, to some degree by both parties, has been the continually burgeoning federal budget cost share of social welfare programs, especially Medicare, Medicaid and Social Security programs. Much has been written, some of it mine, regarding health care costs and the responsibility for their escalation borne (or which should be borne) by outlandish and extortionary drug pricing by Major Pharma corporations. This isn’t a “fix”, but it would be a hell of a start if Congress had the guts to put lobbyist influence aside and repeal Medicare part D’s prohibition on negotiating drug prices like every private health insurer can and does. That simple action would reduce government drug spending by about $133 billion annually! For comparison, that savings would defray about 30% of the 2020 interest on the national debt. (prior to whatever effects we see from Covid-19)

        On the other hand, and more directly related to my topic is a set of demographics which requires nothing more than literacy and common sense to interpret. The implications are plain and the “fix” apparent, if unpopular.

Obviously, we live longer, and not just a little longer, but almost 15 years longer. Actually, in 1935 when Social Security was incepted, the average life span was 60.7 years of age. This meant that as the creators of the concept enacted it, the odds were that the average worker wouldn’t live to collect a dime!

        Looking at the table yields some fairly simple conclusions, but the “big” one is harder to see.  First: in 1940, Ida May Fuller, became Social Security's first beneficiary. She was exceptional because she had lived longer than the average of her peers.  By 1945, at full wartime productivity, for each SS beneficiary, there were 41.9 workers paying into the system (actually building for a while, an excess, the illusory “trust fund”.) Today’s workers, on the other hand are paying today’s recipients. Yes, they are.

         By 1975, because of the increase in recipients and a 7-year increase in longevity, the “workers to recipients” ratio was down to less than 1/3 of the 1945 figure. Meanwhile, the birth rate in the USA had decreased by about a third. The number of retirees reaching eligibility age was still increasing, primarily due to longer life expectancy. As seen in the table, the Social security share of the federal budget was blossoming as well. At this point, another factor came into play, that being the numbers of persons receiving disability or survivor’s benefits from the same pot of cash. Surviving spouse of children coverage was part of the 1935 law, but disability wasn’t covered until 1956. This may seem cynical, but it seems to me that the availability of disability has in many cases created a cottage industry for lawyers willing to arrange it for a slight fee.

        The monster lurking under the bed, however, was the post war “Baby Boom”. From 1945 to 1961, the birth rate in the USA was higher than ever before or since, creating a “bubble” in the progression of population growth. The effects of this bubble have been felt by every industry in America from home building to children’s clothing to insurance to health care, and the list is practically endless. Take a child born to Mr. and Mrs. Howard Cunningham in 1948, after Howard returned from his army duties and they settled down. Their son, call him Richie, born in 1948, hit Social Security full retirement age of 67 in 2015, and he’ll draw Social security, assuming he’s got good genes, for at least another 11 or 12 years. 

        Because the baby boom continued into the early 1960s, and because the birth rate dropped to about half of that of the boom’s peak years, there are now even fewer workers contributing to the payments made to the steadily increasing numbers of boomer retirees planning, like me, to live a lot longer than average.  I’m barely a “pre-boomer, born in 1942. The boomer class of 1955 -1960, when the birth rate per 100 thousand was still over 20, is yet to come. The ‘55s hit in 2022.

        So, what? The first observation, admittedly in hindsight, is that this issue was completely predictable and avoidable. It was obvious by the numbers between 1945 and 1955. Disability compounded the issue, accounting. now, for about 20% of the Social Security payout. What to do?  Let’s first reflect on what could have been done. This trend was obvious at least 70 years ago (1950) and at that time, considering the increased lifespan, a forward thinking Congress (yeah, I’m aware that’s an oxymoron) might have passed legislation raising the full retirement eligibility age by a year each of the following three or four decades. At most, that would now have full retirement at age 69. An accompanying increase for the early retirement age would have also been appropriate. Passing this legislation in 1950 to go into effect in 1960 would have “grandfathered” every worker within ten years of retirement. Had this been done, recognizing that the changes occurring were predictable and irreversible, Social Security would be well and good. As it stands, more than a third of retirees take early Social Security benefits, in many cases because they have prepared for retirement in other ways. In other words, foresight could have “fixed” the problem by 1990. Unfortunately, only a smattering of that philosophy was applied, and that was too late.

         What might be done now? (and this is the part that no politician wishes to address, because any real fix will be unpopular in some place.

        First, recognize that any change that doesn’t grandfather persons with current retirement plans is blatantly unfair, so: pick a time certain, say, at least 5 years from enacting of legislation, which raises the full eligibility age to 68. Also, raise the early retirement age to 63 in, perhaps, just three or 4 years. Additionally, decrease the initial amount of early retirement to encourage individuals to wait. In another five years plan for another bump to age 69 for full retirement, while leaving early retirement at 63. Increase the reward for waiting. In a worst-case scenario, employers to include disability insurance equivalent to Social Security disability as a perk. Also enact realistic legislation defining “disability” in meaningful terms. I’m reminded of the Louisiana mother of four sons, all supposedly mentally unable to hold jobs, yet all of whom had cars, but when their disability status was questioned, her rationale was that “Every young man needs a car.” The literature is rife with well documented claims of disability fraud as well as simple benefit fraud, such as cashing checks of long dead parents.

        Explain, in simple English, that by probably 2035 the problem will moderate on its own, as the “Bulge” of the baby boomers pass through the system and on to whatever waits for them. The birthrate began to decrease after a plateau at 1955-57. The class of 1957 would be 81 by that time and total numbers of beneficiaries would be decreasing steadily.

         Do not, however, like former Congressman Paul Ryan, himself the beneficiary of Social Security survivor’s benefits, address this issue as it the people who depend on it are the ones at fault. Too often this one- dimensional approach, usually including the use of the word “entitlement” somewhere, seems to blame eligible recipients rather than address the issue of Congressional unwillingness to tackle unpopular issues squarely.      

A Mental Disorder

 

                                                   A Mental Disorder

05/22/2023 

Some time ago, there were two separate letters in the local paper which, distilled of all the faux outrage and pseudo patriotism, essentially chastised persons of color as embodied in the personages of many NFL players. At the core of these complaints was “taking a knee” to protest racial inequities and injustices. The gist of both was that Black Americans should just "get over it" because slavery wasn't "all that bad" and besides it was a long time ago. (No really, you can’t make this stuff up!)  Incredibly one such slavery apologist is former Trump cabinet member and current imbecile, Dr Ben Carson, who actually said: “That's what America is about. A land of dreams and opportunity. There were other immigrants who came here in the bottom of slave ships, worked even longer, even harder for less.” Immigrants come voluntarily, slaves certainly did not. This level of ignorance makes my head hurt.

Similarly, we are, almost daily confronted with statements and bullying legislative efforts by our Florida Governor to extend those same hateful sentiments to almost every social or racial concept of which he disapproves. It truly makes one question his mental stability and rationality. 

        As a historian I am staggered by the ignorance represented in these statements and/or sentiments. Space limits how much one can say, but in (too) short:

Other historic forms of slavery were almost universally situational, that is the social situation of the enslaved person made them inferior in the context of their society. In Africa, that could mean a conquered enemy or an orphan for example. These people were frequently adopted into families or eventually freed. They were not born slaves, and not destined at birth to be or die as such.  The same was true of Greek and Roman slaves. In fact, the Romans called central European captives "Slavs" which is the root of the English word "slave."

Black trans-Atlantic slavery was significantly different in one critical aspect which is still with us today in the rants of DeSantis, Trump, Bannon, and their associated scum. That was, the assumption on the part of the slave holder that those he held in bondage were not just inferior as their social situation dictated but were inferior as human beings.  This assumption was not unique to Black Africans.  The English and their American castoffs turned allies, the Americans of New England, considered the Irish as inferior humans, actually classifying them at one time as "non-white."  Native Americans were considered in much the same fashion.

Relatively few Americans, even racists such as Bannon and Trump would have little trouble grasping why the Irish in Ireland still have "issues" with the English. From the slaughters of mid-17th century (see: "Drogheda massacre") until the violent events of mid-late 20th, The Irish were the bastard red haired stepchildren of the British Isles. Once in America, having been encouraged to leave by English landlords, they met much the same treatment in Boston and elsewhere in the Northeast, So what? So as Caucasians, the Irish were able to assimilate into society without the constant reminder to others that they had once been social outcasts. Without the constant reminder of dark skin, the stigma was impermanent. You could lose the brogue, educate yourself and blend. Later the Italians would walk that same path.

Knowing the history of Native American /US relations, one can easily grasp why many Indians still resent many white Americans. If you have difficulty understanding this, read Dee Brown's remarkable "Bury My Heart At Wounded Knee."  Skin color and adherence to centuries old native "paganism" relegated Indians, in the minds of many, to the same "lower life form" status reserved for Black slaves by white Southerners. To the great disappointment of many whites, Indians were poor slave material, being susceptible to diseases to which most Whites had some acquired immunity. Andrew Jackson had little difficulty convincing many Southerners of their racial and social inferiority and of the necessity of simply moving many of them to a land (Oklahoma) which bore little resemblance to their native mountains of the Southeast and the Gulf Coast. 

The English, so quick to condemn slavery and the slave trade in the early 1800s, had made a fortune in the human trafficking business for most of the previous 200 years. Descriptions of Barbadian society are mind boggling in their inhumanity. This, from a monograph by Barbadian Historian and Chancellor of the University of the West Indies, Sir Hilary Beckles, April 2017 is instructive:

"The enslavement of Africans on the sugar plantations of São Tomé by the 1530s undoubtedly represented the first great stride towards the creation of the Barbados black slave society. The Spanish took the chattel enslavement of Africans to Cuba, in the northern Caribbean, in the 1540s. Inexorably, it spread to the eastern Caribbean and found its most fertile environment in the plantation complex of Barbados exactly a century later. Upon this small rock, England gained its first economic success by building the first complete large-scale black slave society. By 1650, it was universally recognized for its economic prosperity, physical brutality and social inhumanity towards Africans. English managers of the model were not to be deterred, however; they pressed on and redefined for the long term the primary character of Europe’s and the Americas’ relationship with Africans.”

It was, tragically, the beginning of a new era in global economic development and race relations. With the black slave society, England’s entrepreneurship forged and realigned the world economic order. Investors and imperial administrators seized the moment and abandoned traditional labor values and relations. Slavery in the Caribbean was a comfortable ocean’s breadth away. Men who defined themselves as “Planters” lived large in London, while their factors drove their human chattel to their deaths thousands of  miles away. Sugar plantations, stocked with thousands of easily replaceable enslaved Africans, produced super-profits. The entire island was quickly stripped of meaningful internal boundaries or frontiers and transformed into endless fields of sugar cultivation. Record levels of white-owned wealth and black deaths defined the slave plantation as a “best practice” in the new business culture.

        When White Americans as some current letter writers did, simply say, "Well, it's over now, you're equal, so what's the fuss" they demonstrate zero sense of history. When the UK outlawed the slave trade in 1807 and slavery itself in 1833, most British Caribbean islands were vast majority Black. One effect of this was that there was really not a white majority to impose, and more significantly, to enforce "Jim Crow" practices on the former slave populations. In the USA, however, Whites represented armed, educated and politically powerful numerical majorities in all but the most cotton-driven Southern states.

 So when a White American points to the 13th Amendment and says "So, what's the problem," they're looking past (or through) more than 90 years of Jim Crow politics, Black Codes, White Citizens councils, White supremacists openly threatening and in many cases killing innocents, and the general continued oppression of Black Americans, for whom the word "Citizen," stripped as it was of civil rights, had a hollow ring.

Jump ahead to World War One when, as White soldiers mobilized, Blacks, formerly turned away from decent jobs, and barred from military opportunities in the main, came North to work, encouraged to do so by those who had shunned them as social and human inferiors since Emancipation. Blacks went to work, thriving in heavy industry, once closed and now open. World War One ended and demobilized whites came home to find a willing labor pool of Blacks, some already employed in former "Whites only" positions. 

    In St Louis, this took the form of Labor Unions deciding to strike for higher wages and to keep the best jobs for whites. During the ensuing riots, Police and National Guard largely stood idly by as somewhere between 65 and 150 blacks were killed by striking white workers. Samuel Gompers, white former cigar maker and then Labor leader, vainly attempted to minimize labor's role in the matter. In a mass meeting in Carnegie Hall, Gompers, then president of the American Federation of Labor, attempted to diminish the role that trade unions played in the massacre by persisting that an investigation was needed in order to place blame, "Why don't you accuse after an investigation?" To which the former president of the United States, Theodore Roosevelt, responded by saying, "Mr. Gompers, why don't I accuse afterwards? I'll answer now, when murder is to be answered." 

The list of continuing discriminatory practice based only on race in America continues today. It is, in too many cases, more subtle but not always.  Does violence beget violence? Sometimes it does, but by any reasonable standard, Americans should, if they be religious, thank their God for Martin Luther King Junior's influence in the 1960s.

One of the more troublesome conundrums caused by this long-lived institutionalized racism could have been seen in many a Boston bar in the 50s and 60s where Irish Americans scorned Blacks, even as pro athletes, for some years after most other teams in the NBA and MLB had integrated. If asked, they might well have responded, as the letter writers have with, "Get over it."  These same 1960-80s Bostonians in the same bar might also have contributed to the "tip Jar" on the bar which, with a wink and a nudge, was understood to be a collection to help arm and finance the Irish Republican Army. Try telling those same yahoos to "Get over" that. 

    Racism destroys logic, bludgeons the human spirit, and poisons children's minds. I honestly believe it to be a mental illness, since it embodies characteristics of illogic similar in some ways to other diseases. It causes spontaneous emotional outbursts similar to bipolar disorder. It makes its victims react to imaginary threats a la paranoia. It causes otherwise outwardly sane people to have total disregard and lack of empathy for an entire group of people personally unknown to them. We call that Sociopathic personality disorder. And finally, it imparts to the sufferer an unjustified feeling of superiority as a human being. Even worse than all these is the sad fact that many of the most vile, rabid and vocal sufferers of "Racism disorder" actually believe that their beliefs, actions and attitudes are in some mysterious way sanctioned by a magical spirit in the sky. Now THAT'S sick!                                 

Poor Pharma

 

Poor Pharma

05/18 2023

This was written in 2018, but with the debt ceiling crisis looming, we all should recognize this fact: The best immediate way to lower the deficit significantly is to amend Medicare Part D to allow Medicare and Medicaid to negotiate drug prices, vice being constrained by law to pay the manufacturer’s usurious “list” price, which no other health insurance plan in the world pays. This essay deals with this and other issues related to the stranglehold Big Pharma has on the nation’s pocketbook, collectively and individually.

          The other flaw in the system is that, while many drug companies issue reduced price coupons, Medicare recipients can’t (by law) use them to reduce their copays. One quick updated example: Rinvoq, the new hot drug for psoriasis, psoriatic arthritis and several other ailments will cost (retail)  $7352 monthly.  With a free coupon) at your local CVs it’s “only” $6291 monthly! If commercially insured, and with a card issued by the manufacturer, that can be reduced to as a little as $5 per month (not available to all US residents and no reduced price coupon is applicable to Medicare/Medicaid patients.) This means in effect, that the Social Security client just has to “bend over and take it,” paying the significant co-pay of part D.

OK, here goes:       

 

"Speaker Pelosi's drug pricing plan would siphon $1 trillion or more from biopharmaceutical innovators over the next 10 years. CBO's preliminary estimate found this bill ‘would result in lower spending on research and development and thus reduce the introduction of new drugs.’"

— Pharmaceutical Research and Manufacturers of America on Wednesday, November 27th, 2019, in an ad in the “Politico Playbook PM” newsletter.

        The above statement was issued of course, by the drug companies’ lobbying arm and awarded a “Mostly False” rating by PolitiFact, the closest to a neutral observer I’ve found. The PolitiFact article dealt with, to a large extent, the uncertainties related to estimating the real numbers of potentially undeveloped drugs as well as the $1 trillion estimated ten year cost of doing the most common sense thing imaginable, currently prohibited by Medicare part D plan, which has been flawed from inception.

         What, you ask, is this drug cost panacea? It’s actually elegant in its simplicity. Allow Medicare to bargain drug prices. What? You mean like every other single health care provider in the nation?  Yep. That’s all. Just allow Medicare to compete with every other insurer and negotiate drug pricing. Banning this was a Bush 43 concession to Big Pharma which was lobbying against any Drug plan. I’ve written numerous times on this topic, so in a very brief synopsis: While private insurers and even the VA dicker with drug manufacturers for lower than “sticker” price on drugs, Medicare is prohibited from doing so.

        One quick and relatively current example: Epi-Pen. Mylan Pharmaceuticals jacked the price by about 100% right after acquiring the patent several years ago. An Epi-pen “list” price for a two-injector package is about $700 today. If an individual on Medicare with part D drug coverage is prescribed Epi-Pen (a lifesaving remedy for some), between the plan and the copay, Mylan will make $700. If the patient sees a coupon (many of which are issued by Mylan, whose actual cost per injector is well under $15) they cannot use it. Medicare must be paid full price. On the other hand, the veteran’s Administration pays well under $200 per 2 pack. Meanwhile at CVS, with a free coupon (not available to Medicare users!) on the GOOD Rx website, I can get the same Epi-pen 2 pack for $141! Even without a coupon, Mylan also sells a generic epi-pen for a mere $400 per two pack. But wait, as they say, there is another brand, just as effective, Adrenaclick, whose manufacturer makes a generic version which sells at CVS for $110 per 2 pack. Of course, most doctors prescribe Epi-pen and so Medicare pays the full price minus co-pay, which the Medicare “beneficiary” must cover.

        Understand this: In just this one instance for the Epi-pen generic which now combined with its name brand partner, has 80% of the auto injectable epinephrine market, The Government pays well over 100% more than most non-Medicare patients pay!  

        Another example is the common anti-inflammatory, Celebrex. While there is fairly reasonable generic now, the actual on-patent drug will cost the Medicare patient between part D and co-pay, as a low figure, about $233 for a 60-day supply. The non-Medicare patient with a printable coupon can buy brand name Celebrex at Walmart for $25.90. Same meds, same amount, 89% cheaper.      

        How does this relate to total US drug expenditures?  With 15% of Americans on Medicare, Medicare drug spending is grossly disproportional to the population share. Part of this is, of course, related to the older population segment in question, but here’s the rest of the story. More than 155 million American industrial workers currently avail themselves of employer provided health care plans. They (in conjunction with their insurers, who strenuously bargain drug costs!) pay 40% of all US Drug spending (2016 data). With about 50 million currently enrolled on Medicare, Medicare paid 39% of that same spending. Understand this: about 44 million Americans, those under Medicare’s bargaining restrictions, paid the same total amount for drugs as 155 million Industrial workers under employer insurance.

        The above is significantly impactful in several other areas as well: Those opposing “Medicare for all” (I prefer National Health Care) cite the current overall cost as a major deterrent, However, they fail to consider the effects of a 50% reduction in drug spending which eliminating part D restriction would accomplish.  In 2016, Medicare drug spending was $128 billion. Reducing that cost by half would generate, over ten years, $648 billion, or 2/3 of the trillion cited in the Big Pharma sponsored article. That figure is not unrealistic, and perhaps even a bit low, considering how much lower insurers bargain prices.

        How to save, for the poor pharma industry? Here’s an idea. As of this year, only one other nation, New Zealand, allows prescription drugs to be advertised DTC (Direct to Consumer). US Pharmaceutical companies spend $6 billion annually doing so, even though 79% of senior US medical doctors call it “Not helpful.”   Eliminating this “not useful” advertising would save $60 billion over ten years, which gets us to $700 billion plus. As a point of interest, the two leading single expenditures per drug are Cialis and Viagra.  But the $6 billion DTC dollars is peanuts compared to Pharma’s “treats” to the medical community. Overall Big Pharma, between cute drug reps and freebies of all sorts including drug samples, spends another $20 billion annually. This is another $200 billion over ten years. We’re close to the dreaded $1 trillion mark and haven’t even dealt with what may be the most mendacious of this whole series of Pharma misstatements.

         The worst is the sin of omission, which is that, while they are fond of citing R & D expenditures, they omit the fact that most new drugs are actually developed by university researchers with NIH grants. (yep, our money!)  In many cases the pharma company buys the patent from the school or the researcher depending on various criteria, and them simply markets it after secondary testing and FDA approval. Gilead’s Harvoni ($84,000 if Medicare pays for it, much less, but still pricey, with good private insurance) is a case in point.

         The developer at Emory University, who worked with an NIH grant, was paid $4 million for his share of the efforts by Gilead. “We the People” should own that patent. After the NIH funded a total $62.4 million for the basic science behind the breakthrough drug sofosbuvir (“brand named” Harvoni after secondary trials and granted 20 years’ patent protection), it was purchased by the firm Gilead for $11 billion. Gilead then turned around and priced it at up to six-figures, even though a 12-week treatment course of 12 pills costs less than $100 to produce. For the mathematically inclined, that’s 8,400% profit! Meanwhile, the generic of Harvoni (sofosbuvir) sells at $127 for the same cure in India! All in all, taxpayers — not Big Pharma — have funded the research behind every new drug since 2010! Read it again, no misprint.

        Another Pharma money saver? Stop leading the nation in Congressional lobbying giveaways. It isn’t close for second place either. Or, realize that a 25-30% net profit (the companies at the top make that) at the expense of the rest of us is abusive. It is, in effect, corporate loansharking. As it currently stands, Big Pharma is fleecing the nation via Medicare drug pricing and a host of lesser but significant evils. Medicare’s full price “pay up and shut up” via part D has been Pharma’s Golden Goose since 2006. Now they’re whining for their right to keep collecting the eggs indefinitely.

        Since Medicare drug plan user have significant co-pays, repealing the Part D “full price” requirement would have  a significantly beneficial effect on family budgets as well as the federal budget deficit.

Peeing on Our Shoes Update

 

Peeing on Our Shoes Redux

05/11/2023

    This is a 2017 post, updated in response to the loathsome Star Parker's op-ed in today's paper.  She leads with "Joe Biden doesn't care about the deficit." The typically delusional Ms. Parker slights Biden's unwillingness to cut certain "people programs" and ignores the huge portion of the deficit stemming from burgeoning Medicare drug costs. Why? Because Pharma lobbies the hell out of Congress to make damned sure Medicare Part D continues paying $600 for epi-pens which cost Mylan Pharma less than $30 to make.

     Following that canard, and even more significantly, which is why I repost this essay, she then tosses out a remarkably uncharacteristic (for her) comment that spending money we don't have, without raising taxes, is foolish. Well no shite, Sherlock!  In truth, the last century from 1970 on has been a lab experiment in proving that cutting taxes does not, contrary to GOP claims, increase federal revenue, but actually reduces it. The essay addresses several presidents, their tax cutting, and the results. In two cases (Reagan and Bush 43) tax cuts for the wealthy were a campaign centerpiece and both of them then spent as if the cuts worked (they didn't).

     In Reagan's case, it was greatly ramped up defense spending following the insane tax cuts because Reagan, apparently alone in the opinion, ignored Laffer's guidance that said Supply Side only works for marginal rates above 50%. (Reagan cut it to 28% and then ramped up massive debt with "Star Wars."           

    Bush 43 also cut taxes on the wealthy and then went to war with Iraq and Afghanistan, spending all the while. The deficit followed the spending.

    Obama reduced taxes slightly on the middle and lower class earners during the Great Recession, but increased marginal rates on the top 1%.

    Enter Donald Trump. His cuts on the lower earning sector expire soon, but the top tier cuts don't. Meanwhile for the 4th consecutive GOP President, tax cuts have resulted in reduced federal income vice more as promised.    

Note: This is about the fallacy of the “trickle down” theory of economics and the falsehoods “spun” from it and put into bad fiscal policy. 

        A major early entry in the bottomless pit of Trump administration "don't piss on my shoes and tell me it's just raining" absurdities was revealed as simply a tax cut on the wealthy, redux.

        It is tragic that a man who apparently, especially after the additional feces flinging economic fiasco of his tariff games, had zero understanding of economics ever had any shred of control of the nation's financial welfare. Don't give me that "He's a financial genius" bullshit, show me his taxes and recall his 6 bankruptcies along the way.  George Santayana (not to be confused with guitar legend Carlos Santana) once wisely said, “Those who do not remember the past are condemned to repeat it.”

 There was another, man, also Republican, also ignorant in the field of economics, who entered office with claims of economic guru status. He knew all about how tax cuts on the wealthy would make us all happy and financially well off. That man doubled the national debt, and Trump’s record deficit is a harbinger of worse.  That man, of course, was Ronald Reagan,

        Nationally known economist and advisor to both Kennedy and Johnson, Pierre Renfret was asked by Reagan's handlers to counsel Reagan, as in talk some sense into the man regarding Supply side economics, which even his eventual VP, George H.W. Bush (Bush 41), called "voo-doo economics."  Renfret soon gave up, stating that Reagan staked the entire economy on his "feeling" that "I just know that it works."  Taking office during an economic period when growth was stagnant, but by no means in recession, such as when Bush 43 left, he doubled the national debt, because he continued to spend ("Star Wars?") as if supply side economics worked, when it clearly didn't.

        In high school, those of us who stayed awake during the mandatory semester of economics learned this as "The Trickle-Down theory." It is based on the following supposition: That every dollar cut in taxes will be "multiplied" through the economy and stimulate growth, ergo everybody's happy. A corollary to this canard is the insistence that deregulation of business is in everyone's best interest, when in fact, while that would probably hold true for the immediate fortunes of the top 1% of the body politic, it is blatantly phony when applied to the rest of us, for reasons I'll explain directly.  One wag has described “Trickle Down”, as “the Rich pissing on the rest of us!”   

        Supply siders begin their justification for their position with a palpable lie. They insist that If taxes are cut on top earners including (especially) corporations, the money not spent on taxes will be plowed back into the economy in terms of expansion, increased salaries and infrastructure. The only actual statistical analysis study done to test this theory (by the National Bureau of Economic Research) reveals that, counter to the promises of the supply siders, the promised results simply never materialize. The results show that for every dollar reduction in income tax, a mere 17 cents per dollar in revenue materializes. For corporate tax reductions, a better, but still woefully short of the pie in the sky promise, 50 cents per dollar revenue results. Read this again: Corporate tax cuts cost twice as much in reduced tax revenue as they produce in actual economic stimulus! This math has been validated through both the Reagan and Bush 43 administrations. It is also being validated by analysis of the Trump tax cuts. In fact, all three were leading "cutters" of tax on the top earners and lead the league in percentage debt increases. "What?" more than Obama?  In terms of percentage increases in the national debt, absolutely.

        Analyzing the probable immediate results of reducing personal income taxes paints a stark picture. Under what we can discern re: the effects of Trump's Tax reform, proposal (it wasn’t  really his, he was and remains incapable of such formulation) the lower 60% of Americans would see essentially no change, but the top .01% would see a monumental reduction in tax obligation. While current budget reconciliation rules dictate that no law shall increase the deficit after 10 years by a single dollar, the recent tax change proposal could increase the deficit after 10 years by $10 trillion in the following decade. This amounts to 50% of the present national debt! 

        So, what did Reagan and his Republican Congress do? In other word, where’s the lesson for those who can appreciate it? The Economic Recovery Tax Act of 1981 also known as the ERTA or "Kemp-Roth Tax Cut", was signed on August 13, 1981, by President Ronald Reagan at Rancho del Cielo, his California ranch, (You know, like Mar a Lago West?) in 1981. Its stated goal was "to amend the Internal Revenue Code of 1954 to encourage economic growth through reductions in individual income tax rates, the expensing of depreciable property, incentives for small businesses, and incentives for savings, and for other purposes".  Included in the act was an across-the-board decrease in the marginal personal income tax rates in the United States by 23% over three years, with the top rate reduced from 70% (that figure should resonate, as it’s what AOC mentioned and took a shit storm of abuse for) to 50% and the bottom rate from 14% to 11%.

        In the following year the deficit ballooned, which in turn, drove interest rates from around 12% to over 20%, which, in turn, drove the economy into the second dip of the 1978-82 "double dip recession". The Dow Jones average, which had been over 1000 before enactment of ERTA, fell to 770 by September 1982.

                Without the decency of so much as a simple acknowledgement that they had been grossly incorrect in their belief in supply side theory, much of the 1981 ERTA was reversed   out in September 1982 by the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), sometimes called the largest tax increase of the post-war period.₁ Sadly, the only way to make supply side theory work is to spend less. In truth, it still doesn't work, but as in our daily lives, spending less saves money. Of course, we all know who the targets of these spending cuts would be, and it isn't the fat cats of Exxon, Morgan Stanley et al, is it?

        So, you ask, where does the money “saved” by big corporations go, if not reinvested and used to grow the economy? A lot if it goes to foreign bank accounts such as those of the recently failed Credit Suisse (CS), which was sheltering millions in untaxed US dollars for US CEOs and other high earners. Although they were required by Swiss law to ascertain that all relevant taxes had been paid before accepting foreign deposits, CS simply didn’t. Even some of the money from the Bush 43 “too big to fail” $700 billion dollar bailout of Wall Street investment banks hurt in the housing bubble collapse of 2008, paid instead as bonuses (yes you read that right) to top execs, ended up, untaxed, in CS accounts. Trump himself had accounts in several foreign banks, including China and the UK.   

        Obviously, this is, or should be, ample recent precedent for anyone willing to dispassionately evaluate it. Even so, Trump, who is far more an economic dullard than Reagan, Kemp/Roth and their ilk ever were, was also seduced to trickle down by what one must assume are several issues. First, it helped his own business interests, which needed more help than even he could give them, by reducing his tax obligations, and he even was candid enough to admit that he was not distanced to any real extent from his business interests. Additionally, it curried favor with those of his social stratum (I originally typed "class" for "stratum", but my computer almost crashed when I used the word "class" in a monograph on Trump. Finally, and saddest to consider he was, and remains, simply too ignorant to learn from recent history and too lazy to educate himself. Hopefully, he will have time in custody to consider these flaws but, narcissist that he is, he will remain simply unable to own them.

         In the final analysis, as tax cuts on the top and tariffs on manufacturers continued to induce suffering at the bottom, Trump and his rubber stamp Senate tacitly echoed the line from Mel Brooks' "History of the World, Part I", where, when a Roman Senator asks, "But what about the poor?" the rest of the Senators respond as one, "Fuck the poor!"  That sums up Trump’s non-existent social conscience and yet, far too many of those whom he loathes still support him.

₁   The consequences of the Reagan Tax cut fiasco and its sub- sequent reversal a year later should have been enough of a real time example of the “Tax Cuts spur the economy” fiction to deter future similar folly. Enter Donald Trump, whose tax cuts have generated zero growth in federal income.