2011 - %3, May

Letting the Dead Pay for Medicare, Part 2

| Sun May. 29, 2011 10:47 AM PDT

Nobody's reading the blog today, right? So that makes it a good time to revisit a topic at great length that's politically out of the question and will never happen.

I've always been open to the idea of means testing Medicare, and a few days ago I suggested a different way of doing it: after death instead of before. For each Medicare recipient, keep a running tally of the cost of their care, and when they die deduct the premiums and copays they've been responsible for. What's left over gets taken out of their estate, the same way back taxes would. Rich people would end up paying their entire bill, poor people with no estates would end up paying nothing, and those in the middle would pay a portion that depends on how big their estate is. Will Wilkinson wasn't impressed:

I've got a better idea. Don't give the elderly rich any government money for health care. Let them pay for it, because they're rich! And give other seniors just the assistance they need—no more, no less—to buy a health plan of a certain minimum level of coverage. Now, I know this is a fantastical idea for crazed, science-hating, Rand-thumping Jacobins, amounts to destroying Medicare as we know it, and is good for nothing but losing elections. But for all that it seems at least as practical as picking over dead peoples' estates.

That phrase — "picking over dead peoples' estates" — is, of course, the Achilles' heel of my proposal, since that seems to be the instinctive reaction of just about everyone to the idea of allowing the government first crack at estates. Still, let's put that aside for the moment. Is means testing of living people really as practical as means testing dead people, as Will suggests? I don't think it is.

First off, let's review Welfare Economics 101. The problem with means testing — any means testing — is that it acts like a gigantic tax on earnings. Suppose, for example, that you receive $5,000 from the government if your income is below a certain level. If you start earning more, your benefits go down. Maybe the income threshold is $10,000, and for every $1,000 above that you lose $500 in benefits. Do you see the problem? It's like a 50% tax on everything you earn over $10,000, and that reduces the incentive to work hard and earn more.

This is a well-known problem with all means-tested programs, and there's no ideal solution to it. You just have to muddle through. The Medicare version of this is that means testing would reduce the incentive to work and save while you're young. Why bother if it's just going to get eaten up by Medicare expenses later in life? Why not live for the moment, keep your income below the means-testing threshold, and then take advantage of free Medicare when you're old?

Beyond that, there's the problem of how to means test and what the threshold should be. Will says that we should give people "just the assistance they need," but that's not as easy as it sounds. Should means testing be done on income or wealth? If it's income, then you're giving away benefits to people who might have modest retirement incomes but lots of assets. Why should they be allowed to keep their expensive homes and cars and boats and stock portfolios while Uncle Sam pays for their hip replacement? But if you means test on wealth, then you force people to impoverish themselves before they qualify for care. Do you want to be the one to tell granny that she has to sell her house and all her belongings before she gets a dime from the government? I didn't think so.

Well, how about just limiting means testing to the genuinely rich? If you have a retirement income of $200,000 and $10 million in assets, then you can certainly pay for your own medical care. No argument there. The problem is that the genuinely rich only account for about 2% of the population. Maybe 5% tops. Sure, you can make them pay for their own care, but it's not going to make much of a dent in Medicare spending. So why bother?

So now consider my idea. You can earn and save money in your youth and know that you'll still have it in your old age. You can spend it as you like. We don't need any complicated formulas for figuring out who qualifies for free Medicare and who doesn't. We don't need to impoverish granny and take away her house.

Instead, we just keep track of what you spend and then take it out of your estate when you don't need it anymore. Will people try to hide assets or give them away in order to avoid Uncle Sam's bite? Sure. But think about this for a moment. The average cumulative Medicare bill after you've died will be on the order of $100-200,000. The really rich, who have the means and the legal talent to do fancy estate planning, aren't going to run down their estates below that amount. It's just too piddling, and they want to have at least a few millions unencumbered by legal chicanery throughout their lives. Conversely, the working and middle classes mostly don't have the ability (i.e., money for expensive lawyers and estate planners) to cheat their way out of this. That leaves the upper middle classes, and they'll probably try to evade some of their Medicare expenses. But that's a relatively small number of people — and without minimizing the problem here, it really is possible to regulate a lot of it away. If Medicare had first claim on estates the same way the IRS does, it would mostly get all the money owed to it. Just giving them first claim on homes would go a long way toward keeping things kosher.

This doesn't completely get rid of the Welfare 101 problem, of course. There's still a certain amount of disincentive to earn and work while you're young, knowing that you can't bequeath every last dime of your money to whoever you want to. But the disincentive is a lot less. Your parents love you and all that, but guess what: they mostly love themselves even more. They'll do a lot more to protect their own access to their wealth than they will to protect yours.

To some extent, of course, all I've done is shift the problem: there's now an incentive to spend all your money not during your working years but during retirement. Why not, if it's all just going to Uncle Sam after you die anyway? There's no question this will happen, but my guess is that it will happen less you might think. I don't know if there's any empirical evidence on this score (how would you get it?), but there's a limit to how much people want to spend down their wealth. Mostly they don't want to sell their houses while they're still alive, for example, and if they're the saving types they probably want to keep a certain amount of their savings around no matter what. Besides, if you means test Medicare, this incentive to spend down your savings during retirement exists regardless of whether the bill comes due before or after death.

So, roughly speaking, that's my case. Charging for Medicare expenses after death solves the problem of trying to figure who deserves what and how much you can afford. We just don't bother. We simply tot up the charges and then take it out of your estate. If there's no estate, that probably means you were poor and couldn't have afforded to pay for it in the first place. If there's a big estate, it means you were rich and can pay for 100% of your Medicare costs. And for the middle classes, which are by far the trickiest for any means testing policy, it allows effective means testing that, almost by definition, takes from you only money that you can truly afford to pay.

There is, of course, no reason this has to be a standalone policy. We still need to rein in the growing costs of Medicare no matter what. You might also want some pretty strict rules about what you can do with your money if you're currently in a nursing home being paid for by Medicare or Medicaid. (Though the rules on this are already pretty strict in a lot of states, which really do require you to impoverish yourself before you qualify for aid.)

But still: this would almost certainly raise a huge amount of money. It would raise it not based on what you might use in the future, but on what you've actually used during your life. And it would raise that money from people who don't need it anymore.

Let me repeat that: It would raise the money from people who don't need it anymore. If you want to think of this in ghoulish "picking over dead peoples' estates" terms, you can. But it's not. What it is is charging people for a service based on whether they can afford it; it's allowing them to live their actual lives free of fear and impoverishment; and it's settling an account the same way that anyone else would who has a claim on an estate. Do you think of a supermarket as ghoulish if they insist that granny's estate pay for the grocery bill she ran up during her final year of life?

There might be technical reasons that make this unworkable (though I suspect most of them could be resolved tolerably well), but philosophically I just don't see the objection. It's fair, it's efficient, it raises a lot of revenue, and it lets people live their lives decently for as long as they're alive. What's not to like?

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Lead, Prisons, and Crack: Why Violent Crime is Down

| Sat May. 28, 2011 2:31 PM PDT

Crime guru James Q. Wilson surveys the evidence for why violent crime rates have dropped so dramatically over the past two decades. The state of the economy, he says, seems to have little to do with it:

One obvious answer is that many more people are in prison than in the past. Experts differ on the size of the effect, but I think that William Spelman and Steven Levitt have it about right in believing that greater incarceration can explain about one-quarter or more of the crime decline.

....There may also be a medical reason for the decline in crime. For decades, doctors have known that children with lots of lead in their blood are much more likely to be aggressive, violent and delinquent. In 1974, the Environmental Protection Agency required oil companies to stop putting lead in gasoline....A 2007 study by the economist Jessica Wolpaw Reyes contended that the reduction in gasoline lead produced more than half of the decline in violent crime during the 1990s in the U.S. and might bring about greater declines in the future.

....Another shift that has probably helped to bring down crime is the decrease in heavy cocaine use in many states....Drug use among blacks has changed even more dramatically than it has among the population as a whole....Among 13,000 people arrested in Manhattan between 1987 and 1997, a disproportionate number of whom were black, those born between 1948 and 1969 were heavily involved with crack cocaine, but those born after 1969 used very little crack and instead smoked marijuana.

So if I can put words into Wilson's mouth, the decline in crime is perhaps one-quarter due to increased incarceration, one-quarter due to reduced cocaine use, and one half due to reductions in blood lead levels in children. Better policing might be part of it too, though the evidence is spotty. Oddly, though, Wilson's own summary is different: "At the deepest level, many of these shifts, taken together, suggest that crime in the United States is falling [...] because of a big improvement in the culture." Aside from the reductions in cocaine and crack use, however, none of this sounds all that cultural to me. It sounds like we cleaned up the environment and built a lot of new prisons. It's hard to see an awful lot of room for cultural explanations here.

Classy GOPer Tim Pawlenty Calls Obama A Pub-Crawling "Doofus"

| Sat May. 28, 2011 9:32 AM PDT

It's been a clunker-filled week for Republican presidential candidate Tim Pawlenty, hardly the "debut" he'd hoped for after officially announcing his candidacy last Monday.

On Thursday, at a press conference in Washington, DC, Pawlenty made his first notable gaffe when he bungled a question about his foreign policy position on Iran. "I think the situation now in Iran is such that Secretary Gates is negotiating with whether the United States military will be there beyond the end of this year," Pawlenty said. "And they're looking to the Iranians to see if they invite the Americans to stay, invite us to stay." He, of course, was referring to Iraq, not Iran—an embarrassing misstep that he later corrected. Here's the video:

That same day, Pawlenty raised eyebrows with a snarky tweet criticizing President Obama for his recent European trip that took him to Ireland and England. Pawlenty tweeted, "@BarackObama sorry to interrupt the European pub crawl, but what was your Medicare plan?" So much for civility.

But on CNN's "American Morning" on Friday, Pawlenty stooped even lower. Predictably bashing Obama for his performance as president, he quipped:

"Any doofus can go to Washington and maintain the status quo and that’s what we’ve got in the White House and in Congress in terms of their attitude about their willingness to tackle these issues. If we’re not going to have leaders who are going to say that and do it and tell the American people, look them in the eye…then we're all wasting our time."

A GOP presidential hopeful ripping a Democratic incumbent? Yawn. But calling him a "doofus"? That's awfully sophomoric. Remember, this is a candidate whose campaign slogan promises "a time for truth," casting the former governor as a politician who is serious about America's skyrocketing national debt and bleak labor market. When he unveiled that slogan, there were already plenty of questions about Pawlenty's "truthiness." Now, with the spicy tweets and using juvenile takedowns, it's even harder to take Pawlenty seriously.

NOAA's Gamble on the Bluefin Tuna

| Fri May. 27, 2011 4:37 PM PDT

The Atlantic bluefin tuna's days could be numbered. The tuna's spawning population, which used to thrive in the Gulf of Mexico, has for decades been on a steep decline due to overfishing, shrinking by more than 80 percent since 1970. While acknowledging this trend, the National Oceanic and Atmospheric Administration announced today that the Atlantic populations of bluefin tuna did not warrant federal protection under the Endangered Species Act, at least for now. From the agency's press release:

NOAA's status review...indicates that based on the best available information and assuming countries comply with the bluefin tuna fishing quotas established by ICCAT, both the western and eastern Atlantic stocks are not likely to become extinct.

That's a big assumption to make, especially considering that national fishing fleets routinely breach the standards set by ICCAT (the International Commission for the Conservation of Atlantic Tunas). ICCAT's standards, moreover, tend to be much weaker than what scientists recommend: In November, the commission set the species' annual fishing limit at about 14,200 tons, but the World Wildlife Fund recommends less than half that amount. NOAA's decision is particularly puzzling because in 2010 the US was one of three countries to support a proposal to the United Nations to ban international trade of bluefin tuna until it rebounds in number, which was voted down after facing strong opposition from major tuna consumers like Japan.

One reason NOAA posits for rejecting the bluefin tuna protection is the declining number of tuna caught in the US, arguing that domestic catch levels have consistently fallen well below its ICCAT-designated quota. But that isn't really a matter of choice, since the tuna's population in the Gulf and West Atlantic Ocean have already declined so significantly. There simply aren't fish left to catch.

A petition, filed last May by the Center for Biological Diversity, also raised concerns about the BP Deepwater Horizon's effect on bluefin, following the European Space Agency's finding that the spill had reduced the young bluefin tuna by 20 percent. And as Mother Jones correspondent Julia Whitty reported last fall, the spill's damages to deep-sea creatures (bluefin tuna included) could be far worse than we think.

But for now, NOAA has decided the study was flawed and inconclusive, and that it will wait to see what the agency's Natural Resources Damage Assessment has to say in 2012 about the BP spill's impact on the fisheries.

Cap-and-Trade Initiative Axed by New Jersey Gov. Christie

| Fri May. 27, 2011 12:54 PM PDT

Yesterday, Gov. Chris Christie (R-N.J.) announced plans to withdraw his state from the Regional Greenhouse Gas Initiative (RGGI)—a cap-and-trade system designed to reduce carbon dioxide emissions 10 percent by 2018—fueling new speculations about his national political aspirations. It also raises questions about the long-term survival of voluntary cap-and-trade programs. As Emilie Mazzacurati, a Thomson Reuters Point Carbon market analyst, told the New York Times, "the direct impact" of Christie's decision "is going to be minimal...The question is, will other states follow?"

Because of that question, Jeff Tittel, director of New Jersey's Sierra Club chapter, calls the decision an "environmental disaster."

Under RGGI (pronounced "Reggie"), participating states set a limit on power plants' emissions and make them buy credits that they can exchange in order to emit specific amounts of greenhouse gases. Utilities with emissions under the limit get to sell their extra credits at quarterly online auctions.

New Jersey had been one of 10 Northeastern and mid-Atlantic states in the regional program, and is the first to pull out. But at a press conference, Christie said he remains "completely committed" to the environment and criticized RGGI as an ineffective program that unfairly taxes electric utilities and citizens alike. He also released a statement listing 21 environmental actions undertaken by his administration.

"I think his statement yesterday had so much hot air it should be regulated by RGGI," says Tittel.

As evidence, Tittel points to Christie's efforts to drain millions of dollars from environmental programs, including $158 million from the Clean Energy Fund, to pay off the state's $11 billion budget deficit; and New Jersey's recent withdrawl from a multi-state lawsuit seeking to cut the greenhouse gas emissions of five major utilities.

Politically, he says, Christie is "trying to have it both ways," presenting himself as a green energy advocate to New Jersey residents while appealing nationally to the Tea Party crowd. (Americans for Properity, cofounded by Tea Party billionaire David Koch, has actively attacked RGGI as an example of excessive taxation.)

"I think he wants to be on a national ticket, whether it's number one or number two," Tittel says. "I'm not sure he's running [for president], but he will be a top choice for vice president."

That's consistent with speculation that Christie may run for president to fill a void in an uninspiring Republican field, something that the governor has repeatedly denied. (Christie's office did not immediately return a call from Mother Jones seeking comment.)

Video: From Allergies to Deadly Disease, Feeling the Effects of Climate Change

| Fri May. 27, 2011 12:04 PM PDT

A rare but deadly fungal disease once occurring only in tropical climates has recently led to several deaths in the Pacific Northwest. Some researchers believe that climate change may be to blame for the disease's emergence there.

When Trudy Rosler first got sick after a visit to Vancouver Island in British Columbia, doctors were stumped. Eventually they discovered that she had fungus growing in her brain stem—one that was previously only known to exist in the tropics. Researchers say that subtle changes in climate over the last 40 years may be the reason it's infecting people much farther north. Here in the US, the Centers for Disease Control and Prevention is already treating climate change as a serious health threat.

Need to Know's medical correspondent Dr. Emily Senay examines how a warming climate is already affecting our health, from making allergies worse to affecting the spread of infectious diseases and pushing the extremes of killer weather.

This video was produced by Need to Know for the Climate Desk collaboration.

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Friday Cat Blogging - 27 May 2011

| Fri May. 27, 2011 12:00 PM PDT

My sister headed off to England for a vacation yesterday, and before she left she insisted that I post some extra special catblogging today so that she'd have something good to look at while staving off jet lag on her first evening in town. We always do our best on that front, but it really all depends on the cats, doesn't it?

So how's this? On the left, Inkblot is camped out on our new sofa, which Karen hasn't yet been over to see. So this is her first look at it. Inkblot's bright-eyed expression is due to timing: I took this picture last night just as Marian was shuttling food around for dinnertime, and that perked him up. On the right, Domino is basking (as usual) in the sun this morning. However, this picture's extra specialness was probably dimmed a bit because she kept batting the camera strap around instead of holding still in some kind of extra specially cute pose. Still, I hope this does the job.

Have a good Memorial Day weekend, everyone. There will probably be a light bit of posting this weekend, but normal blogging will resume on Tuesday.

Zanran, the Search Engine for Nerds

| Fri May. 27, 2011 11:47 AM PDT

Do you like charts and graphs? If you read this blog, there's a good chance you do. So you might want to check out a new search engine, Zanran, which is specifically designed for finding data and statistics. It's still in beta, and I've only played around with it a little bit, but it seems promising. If you give it a try, let us know in comments what you think.

Has Politico Upped Its Game?

| Fri May. 27, 2011 11:42 AM PDT

In an aside to a post about how dismally ignorant Republican lawmakers are about the debt ceiling and what it means, Jon Chait says:

As a journalistic side note, I should point out that Politico has really upped its game and is now producing far more good political coverage than any other outlet, as the large number of my items keying off Politico stories would testify.

You know, that seems to be true. I'm not a religious reader of Politico, and it's not as if they've never run good stuff in the past, but the ratio of solid pieces to idiotic gossipmongering does seem to have gone up lately. Anyone else notice the same thing?

Pakistan is Shocked by Reports of Islamists in its Ranks

| Fri May. 27, 2011 11:35 AM PDT

Today's Captain Louis Renault Award goes to the Pakistani military:

Embarrassed by the Osama bin Laden raid and by a series of insurgent attacks on high-security sites, top Pakistani military officials are increasingly concerned that their ranks are penetrated by Islamists who are aiding militants in a campaign against the state....Army chief Gen. Ashfaq Parvez Kayani, who like the government has publicly expressed anger over the secret U.S. raid, was so shaken by the discovery of bin Laden that he told U.S. officials in a recent meeting that his first priority was “bringing our house in order,” according to a senior Pakistani intelligence official.

....It is unclear how authentically committed Kayani and other top military leaders are to cleansing their ranks.

You can count me among those who think it's unclear just how authentically committed the Pakistani military is to rooting out Islamists in its ranks. Or that any of its top officials were genuinely "shaken" by the discovery that Osama bin Laden was hiding in Pakistan. Or that they seriously expect us to believe they plan to do anything at all about this. As long as these guys are helpful — or perceived to be helpful — in Pakistan's neverending struggle against the Great Satan India, they'll have an endless supply of high-level sponsors. When they're no longer helpful, they'll get purged. American desires really have nothing to do with it.