Canvassing for Elizabeth Warren

I visited a 55-year-old friend who is politically involved and considers himself extremely well informed. He spent today canvassing for Elizabeth Warren in Waltham, Massachusetts. Armed with a clipboard and data sheets on 50 solid Democrats and/or undecided voters, he was somewhat surprised by the shabbiness of the houses that he visited, all inhabited by people getting various amounts and kinds of government assistance.  He said that the stories of how the native-born folks had ended up in poverty often started with a health problem. Thus he was hoping that one thing Warren will do is make health care available to poor Americans. “What about Medicaid?” I asked. He was not aware of the existence of this program. I said “I think it might be the fourth largest federal program, after Social Security, the military, and Medicare”. That did not help. He did not know about any government program to pay for routine medical care for any American under age 65.

[ shows that Medicaid will consume about 30 percent of DHHS’s $941 billion budget or about $282 billion, but this does not count spending by the states. Page 66 of the document explains that this $282 billion is 58 percent of the total for the 57 million Americans enrolled in Medicaid. That means the total spending is about $486 billion.]

My friend could not understand how people in red states could be so stupid as to attempt to reduce the size of the federal government. “I think people in Texas get back 15 times the money that they spend in federal taxes. It is people in the blue states who pay to run the country.”

[ shows that Texas gets 94 cents of federal spending for every $1 that the state’s residents pay in taxes. Of course, this does not mean that the average Texan gets back 94 cents in value for every $1 spent. Most of the spending is presumably military and health care-related. So a hospital and doctor might get $50,000 for performing a procedure, but that doesn’t mean the patient experiences $50,000 in value (especially since the procedure might have been obtained for $8,000 in France or Israel). See this New Yorker article regarding Medicare spending in Texas.]

Separately, I had dinner with some foreigners on Friday evening. A couple from Canada who lives here in Massachusetts said “Is Scott Brown a Republican? I thought that he was an independent.” Conclusion: political advertising works remarkably well!

14 thoughts on “Canvassing for Elizabeth Warren

  1. railmeat: It is not unusual in my experience for Americans with passionate political beliefs to have erroneous beliefs about what government spends. For example, some people imagine that foreign aid consumes a substantial percentage of taxes. Others belief that military spending far exceeds government spending on education and health care (when in fact we could cut military spending to $0 and we would still have a federal budget deficit (see )). That said, I was surprised by my friend’s ignorance of the existence of Medicaid… hence the posting!

  2. It doesn’t really matter who is elected, the healthcare system will eventually bankrupt everyone unless prices come down. Current incentives keep prices high in ways that may surprise you, as explained in this excellent interview on Russia Today (why doesn’t CNN do interviews like this?):

    When a hospital bills $80k for $100 of anti-venom (true example), it really doesn’t expect to be paid $80k. Your insurance company will come in and negotiate that bill down to $10k. Good news, right? Wrong.

    Hospitals count that $10k payment as a $70k “loss” (80-10=70) to maintain their fiction of being a tax-exempt non-profit org while paying multi-million salaries to directors. Then at the end of the year, Washington “rebates” them the $70k as part of the “uncompensated care” program. Then next year, the fictional losses get the hospital increased Medicare and Medicate $$$ through “disproportionate share hospital payments”.

    At least the insurance policy payers only pay $10k instead of $80k, right? Nope. Most insurance company’s profits actually come from “claims reprising” by billing their customers 30% of the $70k “saved” by their negotiating skills.

    And finally, because the actually $10k paid becomes part of a patients legally private medical record, if any legal claims are involved the $90k figure is used instead of the $10k actually paid. Plus triple damages, of course. So a $10k injury becomes a 3×90=$270k legal claim, of which your lawyer will take a tidy 40%.

    Unless some politician is powerful enough to take on hospitals, insurers, and lawyers, artificially high healthcare costs will eventually overwhelm the productive economy.

  3. I’ve never been to Massachusetts but I’m starting to think it should be expelled from the union for supporting a senate candidate who has already been involved in two scandals before taking office. Seriously what does your friend and 54% of Massachusetts voters expect from this charlatan?

  4. I viewed a Bill Moyer (PBS) interview of authors Jacob Hacker and Paul Pierson, who co-authored the book Winner Take All Politics. In a lengthy interview, the authors lament their belief that somehow our government has caused a huge gulf to form between the rich and the middle class. !!!
    I am amazed that reasonably intelligent people could be so stupid. I wanted to scream at the TV as Moyers lobbed softball after softball question at the two authors. The one obvious question that wasn’t asked was how is it our governments “job” to keep the income disparity reasonably close between the top 1% and the middle class? Also, very basic research shows that there is about the same net worth difference between the rich and the middle class today as it was a half century ago.
    It seems the idea of entrepreneurial actions that rewards those that succeed should either be tamped down or simply penalized altogether by saying if you make or are worth more than X amount you must share your wealth with the middle class.
    I have no solution other than to somehow levy a huge tariff on anyone considered rich and then divvy up the booty with members of the middle class in America. It’s really the only solution, since if the middle class paid no taxes altogether, wouldn’t they still be also-rans in the income disparity game?

  5. Seven: I don’t think it is “obvious” as you state that it is not government’s job to reduce income disparity. If you accept the premise that 100 percent of an individual’s earnings belong to the government and are therefore subject to taxation (most people do accept this premise, I think, which is why paying a lower rate than 100% is referred to as “a tax cut” or giveaway to a particular group) then effectively we live in a planned economy where whatever an individual has is due to government action or inaction.

  6. You first have to wind up in poverty before you’re eligible for Medicaid, your friend’s ignorance notwithstanding. Or you have to get old to be eligible for Medicare. If you think Medicaid is ok, expand some basic Insurance to everyone and free up all of the insurance company salesmen and business HR-coordinators-for-insurance-administration to do something more productive. And free all Americans to move around, pursue jobs in other states etc… (Medicaid is very different between various states incidentally)

    The ‘premise’ that 100 percent of an individual’s earnings belong to the government is not the same as ‘are therefore subject to taxation’. You don’t have to be a communist to recognize that a Government always and everywhere “redistributes”: takes money from you and providing some services that you may or may not need at any given moment. A war that somebody always opposes, build highways that you may never drive, police that might never save you from anything, schools that educate children you don’t have.

    People (should) create an economic and legal system to enable a society they want to have, not force their society to be something that conforms to some primordially “natural” market, starting from regulating away monopolies, child labor, pollution. Most people in the world believe some some sort of guaranteed healthcare is essential to their societies. I think most Americans accept that for poor, children and elderly at least.

  7. LV: I did not mean to imply that 100 percent of Americans qualify for Medicaid. In fact, in the original posting I noted that only 57 million (out of 314 million) are on Medicaid. I was merely expressing surprise that a person who considers himself to be superior in knowledge to the vast majority of voters would be unaware of a program that costs nearly half a trillion dollars annually and in which 57 million people (more than the populations of South Korea, England, Spain, Argentina, or South Africa, for example) are enrolled.

  8. Phil re Seven,

    Do you believe that a person earning $45,000 a year has a legitimate complaint if he or she whines that our current economic system is unfair?
    I watched the same PBS interview as Seven mentions and there was a clip of a mid-30’s looking college grad who was apparently appearing before congress to complain that she and her college grad hubby were barely scraping by due to the US’ economic unfairness.
    I wonder what would happen if middle class income earners were told that they were from hereto forward tax exempt, ie they were subject to zero income taxes on the state and Federal level? These middle class folks, while assisted by the net gain of having no taxes to pay would be able to afford a few more comforts yet they’d still, ultimately, be middle class. And therein lies (IMO) the rub: most of these people seem to be angry at life, more than anything else.
    I would have loved to have been able to ask the young lady testifying before congress if she’d ever looked in a mirror, because then she’d be able to see whom to truly blame for her lack of financial success.

  9. Kia: Yes, I do think the person earning $45,000 can say that our economic system is unfair. The government is nearly half of the economy. and therefore determines a lot of wages and prices (i.e., we live in a partially planned economy). The $45k/year earner may feel that he or she contributes more to society than, for example, a retired 50-year-old government worker earning more than $100,000/year or the medical doctor collecting $500,000 per year from Medicare for doing unnecessary procedures (see ). Yet plainly $45,000 is less than $100,000 or $500,000.

    If you don’t have a market economy then each person can overestimate his or her value and be bitter that the government experts and planners did not see fit to reward that value.

  10. Whenever I hear someone describe themselves as “well-informed” it’s practically like they are setting off an airhorn and screaming they don’t really know what’s going on.

    It seems to be the phrase that people who don’t pay attention to an issue but spend a lot of time talking with like-minded friends use.

  11. Phil,

    A change of subject, but something relevant to your past writing. It seems a major science organization is finally acknowledging how bad careers are in science, it reads almost just like your Women In Science essay:

    “A person who says “I love Chemistry and therefore I will become a chemist” is potentially making the same mistake as these medical doctors who end up in the wrong specialty.”

    Ouch. I think you should update your view on industrial positions (Appendix A) in science, they have definitely taken a dive over the past ten years. Those 22 year old real estate kids may not be making $155,000 anymore, but those industrial scientists are making no where near $100K themselves either.

  12. Phil,

    But what could the 45K per year middle-classer expect the Ferderal government to do for them? Your examples of waste in government are valid yet only offers evidence that our hypothetical middle-classer has simply chosen the wrong career.
    Also, you didn’t address my point of what would occur if the middle class were all tax exempt. They’d still be middle class, wouldn’t they? And that’s the point I’m trying to make, you cannot blame the government because of your chosen profession doesn’t pay we’ll, can you??
    The retired bus driver or cop earning 100K a year pension only points out absurdities caused by government unions. Ending these excesses wouldn’t help the average middle classer.
    The lady in the PBS clip may have a right to complain about the Federal governments abuses but ending those abuses wouldn’t help her an iota.

  13. Kia: What could the $45k middle-classer expect the government to do for them? The same thing that the government has done for the health care industry, for example. Our flight school would do a lot better and instructor/mechanic wages would be much higher if there were a Medicare-like program that enabled anyone over 65 to come to our school and receive flight training and for us to bill the government a profitable rate for delivering that training.

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