(the Post I attributed to Felix Salmon was actually written by Mark Thoma. My only Excuse consisting of a Statement that they are both so gifted and prolific that my brain gets confused)
Felix Salmon (really Mark Thoma) gifts Us with an excellent montage of links of Authors evaluating the new Bush health plan. The Genus of the Bush plan concerns me more than the other Authors included in the Salmon(Thoma) Post. Utilization of a Standard Deduction instead of a far more sensible Expense Justification Deduction begs for rationality; a Tax Credit of such magnitudes proposed makes more sense than a Standard Deduction–which is a straight reduction of the Tax rate open to Anyone needing further reductions of the Tax rates–only the Wealthy. A Tax Credit would not impel health care coverage among the Poor, but would at least be a boost to Consumption. A Standard Deduction would not generate better health care coverage, as the Young would purchase the Cheapest to Pocket the greatest difference (Ezra Klein link). A Standard Deduction vastly increased the number of non-Tax-Paying Income Earners in this Country (as Philips of the Tax Foundation notes in the links), and gives Business the opportunity to finally dump Employer-Paid Health insurance.
What is George W. Bush attempting with this health plan?
He cannot seriously be contemplating this Plan will resolve the mighty Health Cost problem in this Country. Business abandonment of Employer-Paid health insurance will bring on more uninsured numbers, even if the Plan was turned into a Tax Credit as Mankiw proposes. Bush cannot expect Health Care insurance premiums to attain higher national levels with this Plan; there are extensive reasons why the total level of premiums paid for health insurance will drop under this Plan. Bush has only Two years left in office, and cannot have any expectation that he can forestall any resolution of the health care crisis in this Country after his Leave-taking, with a preemptive strike using such a worthless initiative. Bush cannot expect the Health Care Expenses of Federal, State, and Local Government agencies will decrease under such a Plan. He certainly does not expect this Plan could possibly raise Tax revenues for the Governments involved, or actually benefit any of Those actually in need of health care insurance.
Is there a hidden malignancy within this Plan?
Could the Answer be that Bush desires to generate a Credit Crisis for the United States? No One has crunched the Numbers as yet, but I would estimate this Plan would reduce Federal Tax revenues by an additional 11-20% of total revenues. The Dollar is already losing value against foreign currencies, and no one could expect foreign central banks really desire to increase their holdings of Dollars. International Corporations, which George W. Bush so capably represents, are awash in liquid assets; garnered, to large degree, with previous Bush Tax polices. Could Bush possibly be inciting another Great Depression, so that the International Corporations can buy out the rest of the industrial capacity of the World at extremely depressed Property values? Could Anyone be so diabolical and Evil as to plan and work for such an Event? On the other hand, could Anyone be so paranoid as to so question the motivations of American leadership? (This Advertisement brought to you from the Man who is paranoid, and proud of it). lgl