Sunday, February 8, 2015

GOP Fights for the Middle Class

I read this and thought to myself, how in the world are they going to accomplish this goal.  CNN The GOP Battle for the Middle Class  Especially when compared to Obama's proposals that want to make the taxes on capital gains and dividends more similar to ordinary income.

Here is an interesting discussion on the topic. CNN What will it Take to Boost the Middle Class  The last comments were interesting, the male speaker said that only the rich will win if societies and economies are set up to encourage lower wages and rights for workers.  This seems aligned to my thoughts, since our personal consumer and investor choices continually encourage companies to pursue lower costs and higher profits.
  1. Are you willing to pay more for American designed, developed, manufactured, managed, distributed product and services?
  2. Are you willing to buy and hold stock in companies that make you less money, because they pass on moving jobs overseas? (ie this includes your pension funds, mutual funds, IRA, 401Ks, college funds)  Or do you invest in the fund with the highest rate of return?
G2A Made in America. The Myth
G2A How to Buy American? Why?

63 comments:

  1. "our personal consumer and investor choices continually encourage companies to pursue lower costs and higher profits."

    AH! I see the problem! You don't think that government regulatory and tax costs have any effect on corporate decision making. You need to restate that. The /free market/ encourages producer and consumer alike to pursue higher quality and lower prices.

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  2. Though factors, I don't think regulatory and tax costs are the deciding factors. Investors typically strive to maximize their return on investment. And American consumers love the lowest cost, most features and best quality, whether it kills American jobs or not.

    Of course if you are okay with air and water quality equivalent to China, that is something I can not understand.

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  3. It depends on what regulatory and cost factors you are discussing. You know as well as I that they matter. What happens when minimum wages are increased? Jobs are automated out of existence, or off-shored. What happens when union contracts exceed productivity gains? Jobs go to China, where labor is cheap. What happens when Obamacare says you have to cover employees working more than 30 hours? Hours get cut, or employees don't get hired. What happens when corporate taxes are near the highest in the world? Capital goes elsewhere. And who bears the brunt of all of this? The middle class, of course. The income inequality that Obama and co. gripe about has gotten worse under his regime, and the middle class has shrunk. Sane governance would reverse course.

    And no, I'm not okay with moving our pollution to China, but that is what government tax and regulatory policy creates. It doesn't make sense.

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  4. I am too tired and overworked to comment, but I will find enough energy to post a link for anyone interested in this topic.

    Is Republican Concern About Middle-Class Wage Stagnation Just a Big Con?

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  5. The GOP isn't about fighting for the middle class. The theory of the Republican Party is that it dedicated to eliminating elements of government which hinder people from prospering.

    What has become increasingly clear to me over the years, is that very often Republicans and Democrats share the same goals. The difference is that Democrats, unlike Republicans believe that we should work to achieve them. Take road repair. A pothole appears in front of your house. Both Democrats and Republicans firmly believe the pothole should be filled. The difference comes when we look for a solution. A Democrat believes you should be able to call a guy from the city who will come by and fill it. Republicans find this solution troubling. Is this create an unhealthy dependency on city services? Does asking the city to fill the pothole stifle innovation? Should the martket be allowed to fill the pothole? If not, can a local church be persuaded to do it? Is filling the pothole at city expense a form of wealth redistribution? Are people who have potholes in front of their house filled at city expense stealing from those who don't? Should the cops be called? The list of questions is endless, and the answering of them lasts election cycle after election cycle. The pothole never gets filled because in some fundamental way, the Republican Party needs the pothole.

    --Hiram

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  6. Laurie, it isn't reality that matters, it's how you look at things. Republicans are the party of science and facts, and Democrats the party of rainbows and unicorns.

    The fact is (studies have shown) that during periods of slow economic growth, the returns on capital are much higher than the returns on labor. Therefore, the stagnant Obama economy, the slowest recovery in however long, will increase inequality of result. It cannot be blamed on Republicans; they weren't in control. Republicans like the economy to grow, and when that is finally "allowed" by the Democrats, inequality will start to decrease.

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  7. Hiram, you pick the strangest examples. I think it has to do with that definition of "we." Sure, when a pothole appears, "WE" think it should be fixed. Since "we" pay taxes, all of us, and we all use the roads, "we" accept that some of that tax money will be used for this perfectly reasonable function of government. But who does the work? Isn't this generally contracted out to the lowest bidding private contractor?

    The argument between Democrats and Republicans tends to come when the city wants to hire people on the government payroll to fix the pothole, with kickbacks to the unions and their political donors at the asphalt factory, while dragging out those repairs for several months. Republicans want it done now, efficiently.

    And let us suppose the argument is set thusly: Suppose some guy on the lower east side, 40 miles from your house, doesn't have a place to "sleep it off" for the night? What duty do "we" have to do something about that? You or I individually, or through our church or synagogue, might feel an obligation and contribute financially to it. But I don't see where "we," collectively and through government's coercive taxation and wasteful spending, have any obligation at all. Democrats apparently do.

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  8. you pick the strangest examples.

    It's just that transportation issues are current now. I just read an editorial the other day that argued we can't fix our roads because the middle class would have to pay for it.

    It's interesting to me how we make the decision to be convinced of something. So often, a stock argument is pulled down from the shelf, applied to a situation, and that becomes decisive. That editorial writer simply uttered the seemingly magical words "paid for by the middle class", and seemed to believe no further thought or analysis was necessary. I found that remarkable.

    --Hiram

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  9. Suppose some guy on the lower east side, 40 miles from your house, doesn't have a place to "sleep it off" for the night?

    More and more as a society, we are doing what I think of as letting people die by the side of the road, or in this case letting them freeze to death in some alley. That's a choice we are making despite the fact that the event occurs 40 miles away.

    --Hiram

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  10. " But I don't see where "we," collectively and through government's coercive taxation and wasteful spending, have any obligation at all."

    Interestingly enough, the crazy liberals in Salt Lake City have come up with a novel solution to the homeless problem -- giving people houses. It's actually significantly cheaper to do that than to do what we're currently doing today.

    And, importantly, it's far easier to get people to change the underlying problems that cause their homelessness when you take away that concern. They can get substance abuse treatment or medical care or education and stick with it far more easily when they have a place to live.

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  11. Interestingly enough, the crazy liberals in Salt Lake City have come up with a novel solution to the homeless problem -- giving people houses. It's actually significantly cheaper to do that than to do what we're currently doing today.

    Utah is sort of a Socialist society. It's not an easily adaptable model elsewhere. But hey, I am willing to look at it.

    ==Hiram

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  12. For me, that video is a classic expression of recessionary thinking. The world is a complex place full of reasons to be bearish, and full of reasons to be bullish. Whether we choose to be bearish or bullish is really a matter of choiced. When the prevailing choices are bearish, the economy slows. When the prevailing choices are bullish, the economy grows. Note that the factors the CEO lists are things that are just about always with us, death and taxes, basically and that if there existence is what determined economic progress, we would always be in a recession from which there is no hope of recovery. What was slowing her business down was not the existence of bearish factors, rather it was her decision to focus on bearish factors that are always with us.

    --Hiram

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  13. Paul Krugman wrote a fascinating column on moralism in economics. We often seem to think that it is the role of things like pricing, and the "law of unintended consequences" to punish things we don't like. Many people will tell you taxes are a punishment. It's a kind of confusion of the objective with the subjective, the sense that my personal beliefs or attitudes are universally applicable and true. I find this way of thinking to be very strange.

    --Hiram

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  14. "So often, a stock argument is pulled down from the shelf, applied to a situation, and that becomes decisive."

    They're called fixed principles, and I wish more politicians had some, and behaved accordingly.

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  15. "More and more as a society, we are doing what I think of as letting people die by the side of the road,..."

    The "we" you are talking about here is government, and it's because government doesn't care. It can't. The "we" of private charity intends no such thing. And at what point does personal responsibility come into play? Dying beside the road may be the natural consequence of some very bad personal decisions. It's not "our" responsibility.

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  16. The "we" you are talking about here is government, and it's because government doesn't care.

    More and more, I think you are right about that. Government seems to care less every day.

    --Hiram

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  17. They're called fixed principles, and I wish more politicians had some, and behaved accordingly.

    It's not so much a question of principles as the arbitrary manner in which we choose to apply them, and the way we convince ourselves that we haven't made a decision for which we might be held responsible.

    The specific incident I was referring to was an editorial that argued basically that we should have road repairs because they would have imposed a burden on the middle class. Do you notice the unfortunate universality of that principle? Everything we might want entails a price that must be paid. The question which we ask in every such transaction is whether the price is worth it. It's a question not of principals but of practicalities, itself a form of principle.

    --Hiram

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  18. Why do you say such strange foolish things???

    "The difference is that Democrats, unlike Republicans believe that we should work to achieve them." Hiram

    "Republicans are the party of science and facts, and Democrats the party of rainbows and unicorns." Jerry

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  19. "The danger for Democrats is that they will lose ownership of the issues of stagnation, opportunity and fairness. But they also face what may be a deeper problem:

    What happens when their candidates are not the only ones who can harness the emotional power that stems from the anger many Americans feel as they helplessly watch the geyser of wealth shooting to the top?"

    I did find this quote in the MJ article very interesting...

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  20. "Republicans are the party of science and facts, and Democrats the party of rainbows and unicorns."

    I see it, in one sense at least, as a conflict between relativism and absolutism. In this case, the difference is not that the Republican Party is the party of science and facts, it's that Republicans, unlike Democrats, think that science yields facts. Science isn't about truth or finality, it's about what works. And scientist know that what works, what's has been useful in the past, doesn't always work now and in the future. In science, there are no authorities, nothing is ever settled, there are no "facts" that are beyond review, experimentation and perhaps ultimately refutation.

    Here's the difference in a nutshell. A Republican will tell you there are no unicorns, The most a scientist can ever say is that no one we know of has ever seen one.

    --Hiram

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  21. "Pointless generalities..."

    Really? Isn't it true what Will Rogers said, "When I make a joke, it doesn't hurt anybody, but with Congress, every time they make a joke, it's a law And every time they make a law, it's a joke.”

    You're again trying to make the point that, either there's no difference between the Parties, or there isn't a right side and wrong side of an issue. I'm not sure which. But when you see unanimous Democrat opposition to stopping an unconstitutional and unwise nullification of immigration law, or unanimously passing an unwise and unconstitutional socialized medicine law, it isn't pointless and it isn't over-generalization.

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  22. "Here's the difference in a nutshell. A Republican will tell you there are no unicorns, The most a scientist can ever say is that no one we know of has ever seen one."

    I like that, somewhat. But let's extend this old joke a notch, shall we? The joke goes like this: An engineer, a scientist and a mathematician are driving through Iowa, when the engineer observes a cow grazing on a nearby hill. "I didn't know they had red cows in Iowa," he says. "That's not correct," says the scientist, "all you can say is that there is ONE red cow in Iowa." "You're both wrong," says the mathematician, "because all you can really say is there is one cow in Iowa with one red side."

    I think, in this case, the Republican would say, "I'll bet that farmer has a red bull, somewhere, too. Good for him." And the Democrat would say, "let's kill the cow and divide the meat among the poor." Somehow, not as funny?

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  23. "Everything we might want entails a price that must be paid."

    Where the argument over principles comes in is when we ask questions like, who is "we"? Is this a want or a need? What is the price? And most importantly, WHO decides what I want or what I need, and what price I am willing to pay, and if I'm going to be forced to pay it, like it or not.

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  24. I have always found engineers to be very rules oriented, one reason, again in my experience, they tend to be Republicans.

    --Hiram

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  25. Is this a want or a need? What is the price?

    To quote one of my favorite Bob Dylan lines, "Your debutante knows what you need, but I know what you want."

    I am also reminded of the third of FDR's four freedoms, "Freedom from Want". Would Herbert Hoover have substituted "Freedome from Need"?

    --Hiram

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  26. If what you mean is that engineers use reason and logic to find solutions based on the known laws of science, you are correct. I wish Republicans were more like engineers, and that Democrats were less like used-car salesmen.

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  27. If what you mean is that engineers use reason and logic to find solutions based on the known laws of science, you are correct.

    I mean precisely that. Engineers focus on "known laws", what are sometimes described as "fixed principles". They depend on things like "logic". Although these are tools that make what we learn from science useful, they aren't science. Science is notoriously disruptive of what is known, what is fixed, and what is logical.

    --Hiram

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  28. "Science is notoriously disruptive of what is known, what is fixed, and what is logical."

    At the fringes, yes. When science found the world was round, it disrupted a lot of things. And even the Star Trek engineers had to come up with "Heisenberg compensators" to overcome the uncertainties our current scientists have made established fact. But the vast body of established science allows engineers to be very good at making our lives better by "applied science" to solving problems.

    And to get back to the topic, it would be good if we had more engineers in Congress, solving problems with logic and facts, and fewer lawyers who believe that they can pass laws overriding the known laws of science, economics and human nature.

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  29. At the fringes, yes.

    Isn't that where advances occur?

    " it would be good if we had more engineers in Congress, solving problems with logic and facts, and fewer lawyers who believe that they can pass laws overriding the known laws of science, economics and human nature. "

    There is a reason James T. Kirk, and not the logical Mr. Spock, was the captain of the Enterprise. For myself, I have always found this veneration for logic among conservatives to be quite odd. Logic is a very limited tool useful in exploring rhetoric. In a world that operates largely without logic, it's utility is highly limited.

    --Hiram

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  30. I think logic and applied knowledge is vastly preferable to infantile emotion applied to liberal fantasy.

    For example, "the race is not always to the swift, nor the battle to the strong, but that's the way to bet." The emotion is there, it's just harnessed to common sense. Something that is completely lacking, it seems, from our politics of late.

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  31. "I think logic and applied knowledge is vastly preferable to infantile emotion applied to liberal fantasy."

    I understand. You would have left Spock to die in that volcano.

    Logic isn't much more than a tool of linguistics, allowing us to analyze rhetoric. And it's a dangerous one that can be highly misleading.

    Consider a recent issue, sort of a syllogism.

    1. Prices determined by supply and demand.

    2. The Fed has recently engaged in a policy of printing money thereby increasing supply.

    3. Therefore, the price of money should go down and inflation should occur.

    The logic here is mostly impeccable. But there is a problem. Inflation isn't occurring. But it must because the rules of logic says it must. So what logical conclusion does the advocate of logic propose. That the way we measure inflation is flawed, essentially saying, who do you believe? My logic or you lyin' eyes?

    In an illogical, irrational world, why would anyone think logic is the answer to much of anything? Is that even logical?

    --Hiram

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  32. There is a difference between faulty logic, pure logic, and solid logic with an acknowledgement of the emotional "facts" included-- my preference.

    Money is a very poor example, but let's see if we can work with it. The "cost of money" isn't what drives inflation; it is the demand for goods and services exceeding the supply. The "cost of money" is the interest rate, and that is being held at near zero as a policy choice, and still the demand for money-- loans-- is so low that all of that newly-printed cash is just sitting on the books at the bank. If the economy ever recovers from Obama's "stimulus," demand for loans will increase; that money will go into circulation and, hopefully (but unlikely) those extra dollars will go into real goods and services. Right now, they're being spent by the government and the cash doesn't really exist.

    Supply and demand is a fundamental law of economics. Government likes to think they can repeal it by fiat and, sometimes, it gets pretty thoroughly mucked up, but it's always there. It is patently illogical, foolish and emotionally potentially damaging to ignore such realities.

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  33. "In an illogical, irrational world, why would anyone think logic is the answer to much of anything? Is that even logical?"

    So, you would have us governed by fools? You seem to have your wish.

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  34. So, you would have us governed by fools?

    Logic and rationality aren't the same things as intelligence. I love dogs. Dogs in my experience are intensely logical and rational beasts. Open up a refrigerator door, and dogs through an impeccable process of logic and reasoning will deduce that there is a strong possibility that they will get fed. But as logical and rational as I find dogs to be, I have never thought it worthwhile to seek their counsel with regard to health care policy.

    --Hiram

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  35. And the applicable axiom here is, "The difference between intelligence and stupidity is that there is a limit to intelligence." Dogs may not be sufficiently intelligent to create a workable healthcare policy for the entire country, but neither is Congress. To believe that they can displays not a lack of intelligence but a supreme and willful stupidity.

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  36. 'Dogs may not be sufficiently intelligent to create a workable healthcare policy for the entire country, but neither is Congress."

    So I guess the logical question, who is intelligent enough to create health care policy? Or should we do without one?

    --Hiram

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  37. Here is a contradiction by the way. Republicans believe that health care insurance should be available to sold across state lines. Yet they oppose a national health care policy. See the contradiction?

    --Hiram

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  38. "who is intelligent enough to create health care policy?"

    I hold that 300 million Americans are collectively smarter than 535 members of Congress. I also hold that any one of us knows better what we want, what we need, and what we are willing to pay for it than is any single member of Congress. So, the best "national health care policy" is to leave it to the states, and to there have a largely free market.

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  39. "Republicans believe that health care insurance should be available to sold across state lines. Yet they oppose a national health care policy. See the contradiction?"

    Well, I suppose if you believe that any "national health care policy" is exactly like every other, you would be correct. I think there can be vast differences between the least intrusive and most extreme policies. I think Congress would be absolutely correct to exercise its constitutional authority to regulate interstate commerce and allow insurance to be sold across state lines. Everything else, they should exercise restraints on any authority "not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

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  40. "I hold that 300 million Americans are collectively smarter than 535 members of Congress.

    Really? As one of those 300 million Americans I know virtually nothing about health care or health care policy. You know, when I talk to voters I find it's often the case that they don't know the most basic things about government, that a senator's term is six years for example. That being the case, why should I have confidence in their health care policy expertise?

    --Hiram

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  41. I don't expect them to be policy experts, prescribing for anybody. I DO expect them to know what they want and what they are willing and able to pay for with regard to food, clothing and shelter. Why should health care be any different?

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  42. Why should health care be any different?

    Just like they want affordable food available freely, they want affordable health care.

    You know there is very little disagreement on the substance of Obamacare. It's a Republican program accepted by Democrats. The reason why America, until the adoption of Obamacare was alone among industrialized countries, was without a system of national health care had nothing to do with what Americans wanted. It was because of the system of government we live under, one designed to prevent the government from acting.

    --Hiram

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  43. Sorry, but I don't accept that. If all the other countries jumped off a bridge, we still don't have to. We have the health care system we do because government meddled too much in it already, starting with wage controls way back when that led to employer-based insurance, followed by Medicare which completely distorted the marketplace and stifled innovation. Despite all that, our health care system became the best in the world in terms of results and new developments. I doubt that can continue under Obamacare; it's just a bad idea.

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  44. And I still think you are mixing apples and eels. If Obamacare is essentially a Republican program, then at least one Republican should have voted for the thing. And they keep voting to repeal it. SOMEPLACE along the line, the Democrats took a Republican idea (if that's what you want to believe) and turned it into something anathema to Republicans.

    Back on topic, this was never designed for the middle class, but to make insurance "affordable" for those who cannot afford it-- the lower class. Supposedly it was to hold the middle class harmless but anybody with two brain cells to rub together knew that was a curve ball sales pitch at best.

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  45. "If Obamacare is essentially a Republican program, then at least one Republican should have voted for the thing."

    Obamacare got huge support from Republican constituencies. That's why it passed. The Republican Party is a much bigger tent than the Republican congressional party, which is in fact, not very representative of it. Obamacare didn't get any Republican support in Congress for reasons of political strategy, not because of the merits of program itself.

    I would have preferred to make Obamacare more responsive to the middle class, but remember there were those Republican constitutencie that needed to be taken care of, so we had to take the deal we could get. Any Republican plan would have taken care of those same Republican constituencies, at the expense of the middle class too. That's just the way the power dynamics work.

    --Hiram

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  46. "Obamacare got huge support from Republican constituencies."

    Please name them. The insurance companies were promised big windfalls, and the AMA likewise. Both have come to deeply regret being suckered in. Anybody else that was fooled? Because that's the only way any sane person would support the thing. And without the "Cornhusker kickback" and "Louisiana Purchase," not even all Democrats would have voted for it and it would never have become law.

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  47. Please name them.

    Insurance and drug companies to name two. Obamacare is warmed over Romneycare, and the product of Republican think tanks. And versions of it such as Jindalcare, retain Republican support too.

    --Hiram

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  48. "Jindalcare" seems to be a complete antithesis to Obamacare, and "Romneycare" is only called that because it is the best that then-Governor Romney could pass with Democrats in charge of the legislature. Like Obamacare, it's been something of a failure, though on a smaller scale.

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  49. id...

    "Jindalcare" seems to be a complete antithesis to Obamacare, and "Romneycare" is only called that because it is the best that then-Governor Romney could pass with Democrats in charge of the legislature.

    Well no. They are insurance premium supplement plans. The details vary as they always do but that's what Obamacare is too. It's a product of Republican think tanks.

    --Hiram

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  50. So, all of the credit for Obamacare's wonderful results (even if we have to make them up) go to Democrats, and all the blame for its manifold failures fall on Republicans? Now I see it; I should have known.

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  51. And Obamacare (Medicare and Medicaid) are NOT "premium support plans" because the plans for which you can get subsidies are strictly confined to a few government-approved choices. That was the failing of Romneycare, too, by the way. You can't tell me what I am buying AND what I'm paying for it and then call it a choice.

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  52. Oh come now, ACA is totally different from Medicare and Medicaid. What rationale do you have for putting them in the same sentence?

    With ACA, people have a great deal of choice.

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  53. "And Obamacare (Medicare and Medicaid) are NOT "premium support plans" because the plans for which you can get subsidies are strictly confined to a few government-approved choices"

    Certainly it's the case that policies that are available are premium supported. That's true of Obamacare, Romneycare, and Jindalcare although the details differ.

    --Hiram

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  54. ACA is totally different than M & M? How so? As far as I can tell, the government dictates that you must buy it, what it will cost, what it covers and how much they will pay the provider. Some variations, of course, but essentially the choices do not belong to you.

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  55. And let's clear up what "premium support" means. It means that the government (or somebody) gives you a check and lets you go buy any kind of health insurance you want on the open market.

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  56. With ACA one has many providers to choose from and different levels of coverage available. And the premiums are set by the providers.

    And yes it forces people to buy health insurance and stay in the pool. This is the best way to prevent people from taking advantage of others and only buying coverage when they get sick.

    Definitely more choice than I get at my work place.

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  57. "Premium Support" can have many meanings, not sure why you think yours is correct one.

    And the reality is that people are being given tax credits to offset the cost of the premiums they paid to a private insurance firm.

    Now if ACA was a single payer system like Medicare and Medicaid, then I may agree with you.

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  58. "With ACA one has many providers to choose from and different levels of coverage available."

    In Minnesota, we now have one less provider. In some states there are only one or two. That's not an open market by any means. As for the "different levels of coverage" that's a bit of a stretch, too, since there are so many coverage requirements for even the basic package that much choice is lost. What's wrong with choice?

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  59. "'Premium Support' can have many meanings, not sure why you think yours is correct one."

    OK, it means whatever you want it to mean, and I will choose my own definition likewise. Now, how are we going to discuss this without a common language? In common usage, it means what I said-- a blank check, minimal strings. It's a way of getting government to pay for something-- insurance in this case-- (presumably for those who cannot otherwise afford it), while gaining all the benefits of free market competition and free choice.

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  60. The problem with absolutely "free choice" is that so many Americans are idiots and another large group of Americans like to take advantage of idiots...

    Thus society has chosen to put bounds on what may be sold and what may be purchased. And it is trying to force free loaders to buy something rather than relying on our society to pay their total bill.

    This is the same reason we needed social security, medicare, unemployment and disability coverage mandated.

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  61. "...so many Americans are idiots and another large group of Americans like to take advantage of idiots..."

    Yes, you are correct. And the problem with trying to make the market idiot-proof is that it creates an adaption towards ever-better idiots. At some point, idiots have to suffer the consequences or they never learn. And in the meantime, all of these mandates and controls stifle the non-idiots from building the better and cheaper products we might all benefit from.

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  62. If humans shared a collective memory, you may be correct. Humans would learn from someone ele's mistake. However since we do not and new inexperienced people are always arriving at a point in life, we create laws to prevent other humans from experiencing the same fraud, negligence, etc.

    Besides, since we don't let people starve or die in the streets, we are already protecting them from the consequences of their choices.

    I don't like all these laws to protect people from themselves and predators, however I don't have a better idea.

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  63. You are not allowing for the matter of degree. We have laws against fraud, misrepresentation, false advertising, and all sorts of ways some con others. We have regulations and tort law to curb people making faulty products or services, though "caveat emptor" ought to be in everybody's vocabulary and taught in the schools. But how does it help the average Joe consumer if CEOs have to sign off on their Sarbanes-Oxley audit?

    Yes, "we" don't let people starve in the streets (actually, we do), but there is a great difference between that and having government tax away $20,000/year for each and every one of them, just to prevent it. You get more of what you pay for, and poverty and irresponsibility are no different.

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