Curb Medicare Spending the Ryan Way | Michael F. Cannon | Cato Institute: Commentary

Curb Medicare Spending the Ryan Way | Michael F. Cannon | Cato Institute: Commentary: "experience and public choice theory suggest that the Ryan plan has a better shot at reducing future Medicare outlays than past efforts, because the Roadmap would change the lobbying game that fuels Medicare's growth.

Medicare dictates the prices it pays clinicians, facilities, medical suppliers and private health plans through more than a dozen different price-control schemes. Efforts to reduce those prices typically fail because of what Tom Daschle calls the 'patient-provider pincer movement': Medicare enrollees and health care providers join forces to undo those cuts.

Each producer that depends on Medicare for its income faces an enormous incentive to lobby for higher prices. The prices for, say, hospital services could make or break a lot of hospitals. And if the hospitals don't lobby to increase those prices, who will? Enrollees like the easy access to medical care that comes with higher Medicare spending."

"The Roadmap, in contrast, would substantially diminish each producer group's incentive to lobby for greater subsidies."

"If hospitals lobby for a higher voucher growth rate, how will they know that the added subsidies will come back to them, rather than ambulatory surgical centers? Many groups would just free-ride on the lobbying efforts of other groups."

"A voucher system would also put downward pressure on prices across the entire spectrum of care."

"Seniors spend their Social Security checks on lots of things, but we don't see golf courses or metal-detector manufacturers lobbying to increase Social Security spending the way health care providers lobby to increase Medicare spending. This largely explains why, on a per-capita basis, Social Security outlays grow at roughly the rate of the economy, while Medicare outlays grow about 2 percentage points faster."

"Vouchers are the most plausible way to restrain Medicare spending. They are also the most humane way, because they let enrollees retain the benefits that mean the most to them."

Time as a Price - Predrag Rajsic - Mises Daily

Time as a Price - Predrag Rajsic - Mises Daily: "A recent study has shown that in most of [Canadian emergency rooms] the average wait time exceeds 6 hours and sometimes reaches up to 23 hours."

"constantly full waiting rooms are not an unavoidable fact of life but a product of a 'priceless' supply system, where waiting for service acts as a rationing substitute for the market price."

"Most people have some mild health-related problem most of the time, but it would not be worth it to them to wait for six hours to receive treatment. They might, however, be willing to wait 20 or 30 minutes or even an hour. The wait time is the only price they pay for the service, but if the price is too high, these people will choose not to use the service offered by the healthcare provider.

However, there are always a small number of people that would be willing to wait six or more hours because the value they put on their particular health problem is quite high. Generally, as the wait time decreases, the number of people willing to wait increases. For example, in our city of 300,000 people, I would expect far more than 5 (or even 30) persons per hour coming into the emergency waiting room if they had to wait only five minutes to receive a service and not provide any money in return."

"While paying for a service with money represents an exchange of claims over resource ownership, paying for the same service with time represents outright resource destruction. The time spent in waiting is lost forever and cannot be used in any productive activity, whereas the money paid for service could be used for purchasing goods and services that had already been produced. The time not spent in waiting could be used for the production of new resources."

Death-wish Democrats | Richard W. Rahn | Cato Institute: Commentary

Death-wish Democrats | Richard W. Rahn | Cato Institute: Commentary: "The average deficit when the Democrats were in control was 4.4 percent of gross domestic product (GDP), 3.9 percent when control was split and only 1 percent when the Republicans were in charge."

Big fans put 2 houses to hurricane-force wind test - FoxNews.com

Big fans put 2 houses to hurricane-force wind test - FoxNews.com: "The conventional house in the test was built to the standard required in the Midwest. Houses in coastal areas would typically have more reinforced construction"

So the test wasn't very useful -- it didn't compare what is normally used on the coast.

GOP 'Pledge' Lacks Both Cuts and Courage | Gene Healy | Cato Institute: Commentary

GOP 'Pledge' Lacks Both Cuts and Courage | Gene Healy | Cato Institute: Commentary: "Should Republicans recapture the House, they promise to cut an unspecified $100 billion from a $3.8 trillion federal budget in 2011."

"one of the Pledge's architects wouldn't name a single program he'd cut, even in nondefense discretionary spending."

Regulators Have Learned Nothing from the Financial Crisis | Mark A. Calabria | Cato Institute: Commentary

Regulators Have Learned Nothing from the Financial Crisis | Mark A. Calabria | Cato Institute: Commentary: "The favoring, if not actual subsidizing, of sovereign and mortgage debt not only remains, but is expanded, under Basel III.

It is no coincidence that these are also the markets that have suffered the most disruptions and required the largest bailouts. Any framework that treats debt issued by entities such as Fannie Mae and Greece as essentially risk-free is a framework that cannot be taken seriously."

Tax Cuts and Revenue: What We Learned in the 1980s | Richard W. Rahn | Cato Institute: Commentary

Tax Cuts and Revenue: What We Learned in the 1980s | Richard W. Rahn | Cato Institute: Commentary: "The Reagan tax-rate reductions did, in fact, pay for themselves — but it took about seven years."

"In the 30-year period from 1970 to 2000, the maximum tax rate on individual income ranged from 28% to 70%, yet individual tax revenue as a percentage of GDP ranged from a low of 7.6% (when the maximum rate was 70%) to a high of 9.6%. Total tax revenues ranged from a low of 17.1% of GDP to a high of 19.8% during that same 30 years. Over the long run (seven years or more), individual federal tax rates not exceeding 25% or so would probably maximize federal tax revenues"

"Their analyses show that increasing the capital-gains tax rate would result in lower tax revenue and higher deficits. The studies are also congruent with the historical experience of the last 40 years.

The official government tax revenue and economic forecast models are still largely Keynesian static models, rather than dynamic; they do not capture most of the incentive and long-term effects of tax-rate changes. As a result, they give the wrong answers. These models missed the revenue gains from the 1978 and 1997 capital-gains rate cuts. They missed the economic gains from the Reagan-era tax cuts. Most recently, they spectacularly failed in their employment, tax revenue and economic growth forecasts from the Obama 'stimulus' program."

Six Months Later... | Michael F. Cannon | Cato Institute: Commentary

Six Months Later... | Michael F. Cannon | Cato Institute: Commentary: "ven before the price controls affecting children took effect today, major insurers Wellpoint, Cigna, Aetna, Humana and CoventryOne announced they will simply stop writing child-only policies rather than suffer the inevitable losses. Thanks to this 'consumer protection,' many parents will be unable to insure their children. Expect other insurers to follow suit as adverse selection causes premiums for existing child-only policies to rise.

When those price controls go marketwide in 2014, they will force insurers to avoid sick adults as well. Economists have shown that unless insurers avoid the sick, the price controls will put them out of business. Look for insurers to avoid, mistreat and dump the sick by marketing themselves only to healthy people, skimping on claims processing and customer service, and dropping benefits that sick people value — not because insurers are heartless, but because that is what Obamacare rewards.

The law's authors admitted as much when they included new subsidies and regulations (on marketing, claims payments and benefit design) to mitigate those perverse incentives."

"For example, three years before they even take effect, the marketwide price controls are eliminating an innovation called 'guaranteed renewability,' which protects sick patients from high premiums and skimping. Obamacare has pushed BlueCross BlueShield of North Carolina to dismantle its guaranteed-renewability feature and transfer more than $100 million from sick to healthy customers."

Why Derek Jeter and LeBron James Are Running for Florida | Jim Powell | Cato Institute: Commentary

Why Derek Jeter and LeBron James Are Running for Florida | Jim Powell | Cato Institute: Commentary: "These cases offer a reminder of the futility of trying to soak the rich — something President Obama wants to do by letting the Bush tax cuts expire for high-income earners. These people typically have skills that are in demand around the country and often around the world. They can live practically anywhere without impairing their ability to earn a lot of money. And so they will move somewhere else that is glad to leave their bank accounts alone."

Tax Hikes Not Needed to Balance the Budget | Daniel J. Mitchell | Cato Institute: Commentary

Tax Hikes Not Needed to Balance the Budget | Daniel J. Mitchell | Cato Institute: Commentary: "Washington insiders say that tax increases are unavoidable because deficits are too large. Since these often are the same people who supported 'Obamacare' and the so-called stimulus, their crocodile tears about red ink probably are not very sincere. But hypocrisy is not necessarily the same as inaccuracy, so let's look at whether it is possible to balance the budget without higher taxes."

"One approach would be to get rid of counterproductive forms of spending such as the Department of Agriculture, energy-subsidy programs, Department of Housing and Urban Development, Small Business Administration, Department of Education, National Endowment for the Arts, and Department of Transportation."

"For much of America's history, when such restraints were honored, federal spending was on average only 3 percent of economic output. If we did the same thing today, federal spending would be about $450 billion. We'd not only have a balanced budget; we'd have a giant surplus and could easily afford to abolish the income tax."

"Politicians simply need to reduce the rate at which spending is growing.

It's a simple matter of mathematics. The Congressional Budget Office estimates that tax revenue will grow by an average of 7.3 percent annually over the next 10 years. Reducing the budget deficit is easy — so long as politicians increase overall spending by less than that amount. And with inflation projected to be about 2 percent over the same period, this is an ideal environment for some long-overdue fiscal discipline."

"If spending is simply capped at the current level with a hard freeze, the budget is balanced by 2016. If we limit spending growth to 1 percent each year, the budget is balanced in 2017. And if we allow 2 percent annual spending growth — letting the budget keep pace with inflation, the budget balances in 2020."

"Milton Friedman was correct many years ago when he warned that, 'In the long run government will spend whatever the tax system will raise, plus as much more as it can get away with.'"